Re: [CANSLIM] New NASD trading restrictions?

From: Spencer48@aol.com
Subject: Re: [CANSLIM] New NASD trading restrictions?
Date: Tue, 18 Mar 2003 16:16:14 EST

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Tom:

     I may be shooting from the hip on this, but it seems that Ameritrade is 
trying to make money on the float.  For instance, X sells a stock in the 
morning; Ameritrade get the money from the sale the same day (for example, 
through a wire transfer); Ameritrade lets the money work for them until the 
sale is settled 2-3 days later. 

     This is sort of looks like:  A bank not allowing you the cash from a 
valid check from across town, but rather waiting 10 days before letting you 
use the increased amount in your account.

     Anyway, that's the way it appears to me.  I can understand a brokerage 
house not allowing you to buy until your check clears (assuming it hasn't 
done business with the client before), but not permitting the client to use 
the proceeds of his sale when the sell is to NASDAQ (I believe that's what 
the stock-clearing houses are for: To warranty that stocks sales trading in 
their enviroment will be honored)....  That sounds kind of hinky to me, and 
Ameritrade saying that it is a Fed. Rule sounds kind of duplicitous to me.

jans


In a message dated 3/16/2003 5:46:04 AM Eastern Standard Time, 
stkguru@bellsouth.net writes:

<< Jerome, I am not aware of such a new rule, but I have heard this claim 
before on occasion over the years. The rule is, you must have settled funds 
on settlement day to pay for a purchase. How those funds get there is of no 
concern. If sufficient funds are available on settlement day as a result of a 
sale, the sale was done the same day as the purchase, AND the settlement 
cycle is the same for both the buy and the sale, then you are covered. >>

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