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CANADA'S BEST KEPT SECRET. Many canadian speculators don't pay for their stock.
Therse Canadians speculators bet on stocks., aginst the equity in their account.
We've heard about T-3 etc. That is bull. The truth is often, more like T-12
or T-20 (as in 12 or 20 days to settle instead of the requeird three days).
Brokerage firms have been known to exend, to their best clients, the time they
can hold "unpaid stock" for weeks. What is also not very well known is that
brokerage firms can, and frequently do, short sell any stock which remains
unpaid (they do so to protect themselves). Thus, during an exciting runup,
one observes (or hears about) massive shortselling of a stock -- the stock
wasn't paid for, so the brokerage firm shorts it. A brokerage firm.s credit
manager can quite excitedly extend your "credit terms" so that you have "more
time to pay for your stock". Exxentially, you end up betting aginst yourself,
under these circumstances, because the brokerage firm is shoorting your purchase.
Later, you end up selling at a loss and the brokerage firm covers at a profit.
The house nearly always wins. Your stockbroker gets his commission wheather you
lose or not. {this came from a board I was reading last night}
-- Kinda makes ya wonder why you place a buy/sell and one time it's all one trade,
were the next is 3 to do it. one buy, one sell, one short. |
