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Non-Tech : DATEK- COME LOSE YOUR MONEY
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To: Fridrik Skulason who wrote (13)11/12/1998 9:42:00 PM
From: BradC   of 38
 
<*RISK*> Good point, but I would have thought Datek (or the clearing corp) would be on the hook whether or not I actually withdraw the funds. When I sell a stock I sure hope I don't have to depend on the creditworthiness of the buyer to get my money. And those funds from the sale are also insured up to the applicable limits.

This element of risk to the broker and/or clearing corp. sounds like a plausible explanation as to why they would restrict further trading before settlement. The thing that continues to interest me is why Datek is the only one to allow immediate use of the credit. The brokerage business in the US is so huge and competitive that I find it very interesting one up-start broker can stand out like that. Are they taking on too much risk? What would they do in a major market meltdown where margin calls could not be met?

Brad
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