eims2000, I hear you loud and clear. No, I don't underestimate the "short problem" at Datek. In fact I wrote several posts complaining about the fact that Datek has gone from being the best broker to short with (early 98) to one of the very worst (from amongs the online brokers).
There are many stocks I would love to short, which are not available. These include stocks which were some of my favorite shorts - not available through Datek, even though they are available through other online brokers. Some of these don't seem to have any particular problem with small float or hard-to-come-by shares. Like I said before, things are so bad, one day I expect to be unable to short a MSFT :(
I frankly do not know the reason why this has happened. I speculated, that perhaps the SEC is cracking down, or examining the online brokerage industry very closely, and Datek is "cleaning up" it's act? I suspect that in the good old days, Datek let you short, and didn't worry about finding shares. If you go strictly by the book (SEC regulations) I believe a broker is formally required to check availability of even the biggest and most liquid stocks (since you mentioned Yamner, you can check with them - this is what Steve Goldman claims). With the SEC getting nosy, I can imagine Datek feels uneasy.
In the end, I do not know what the problem is; I do know that you are right - active traders are the bread and butter of this broker (Datek more so than other online brokers). Many openend an account with Datek, because of the fantastic availability of shorts. Now that this is no longer the case, many may leave - or, almost as bad - cut back on the volume of trading they do with Datek (as an example - I did 22 trades today - and had I been able to short freely, I would have easily done 10-12 more on the short side).
I don't know if we'll ever find out what caused this dramatic change in Datek short policies, but I sure wish they'd re-think it. Then again, maybe they don't have a choice. We just don't have all the facts... |
