Despite your attempt to obscure both the content and outcome of our previous exchange by posting unrelated links, the following links show the progression of the margin acc't/shorting debate, which Steve Goldman verified my position on:
Message 12727433
Message 12727496
Message 12727492
Message 12981120
Message 12981390
Message 13008704
For those not inclined to click through, the messages are below:
Sunday, Jan 30, 2000 8:58 PM ET
Hmm, can you tell me how the short sale of OTC-BB stocks are initiated if there's a regulation requiring marginability? I believe you're mistaken.
Regards,
Barb
Sunday, Jan 30, 2000 9:13 PM ET
No, Bear, I'm not.
OTCBB stocks are in fact not approved for margin in the U.S. under Reg T. However...
...that does NOT MEAN that they can't be short sold. Saying that OTCBB stocks cannot be short sold is a common tout's utterance, right up there with "call in your certs."
I short OTCBB stocks all the time, in fact, have only been long a penny stock once - six years ago.
The short selling of bulletin board stocks has to do with (a) a broker-dealer with a great, expansive stock loan and borrow department and the likelihood of being bought-in, or (b) utilizing an offshore brokerage account, whereby under foreign lending rules Reg T does not apply.
What I said previously was that a short sale can only be executed in a margin account, not a cash account. That is the case.
Nonetheless, that's not what I corrected you on. Your previous musing about marginability being a function of the broker was wrong. Regulation T and the marginability of securities is set forth by the Federal Reserve.
If you have any other questions, let me know.
LPS5
Sunday, Jan 30, 2000 9:12 PM ET
steve, is a margin account required to initiate a short sale under reg T or any other Federal or exchange rule? If so, how are the short sales of OTC BB stocks initiated? Am I mistaken in my impression that an OTC BB can't be carried in a margin account?
Regards,
Barb
Saturday, Feb 26, 2000 7:28 AM ET
Yes, margin account is utilized for shorting, regardless if the stock is marginable.
–Steve
Saturday, Feb 26, 2000 9:14 AM ET
So Steve - would you find this post accurate?
LPS5
Message 12727496
Tuesday, Feb 29, 2000 9:22 PM ET
For the most part, though by definition, some bulletins may in fact be marginable.
-Steve
That's how it went. Remember, mother?
You have a good night, and take care :)
LPS5 |
