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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: JustInTime who wrote (4382)	1/15/1999 10:29:00 PM
From: Anthony@Pacific	Read Replies (1) \| Respond to of 122087

you can short any stock in a Margin account and others here may shed more light on the subject ..nice to see you with us..

To: JustInTime who wrote (4382)	1/16/1999 11:39:00 AM
From: Kevin McKenzie	Read Replies (1) \| Respond to of 122087

EB, this is a detailed answer to a couple of your questions: once I almost sold 2000 shares of a stock that I had only 1000 shares of, the web page told me that since I had only 1000 shares of the stock, I had to make sure I delivered the other 1000 shares w/in three days. If I didn't actually own these other 1000 shares than I would in effect be shorting the stock....made me think that I could always just sell stocks that I didn't own, as long as I bought them back w/in three days (in the same account). Is this legitamite? legal? Is there a downside to this? A couple points: Bottom line is you are not allowed to do this First, if you sell a stock on Monday, you must have the shares available to settle in three days. So in your example, you would have been required to have the shares in your account three days later. However, if you place an order to buy shares three days after your sell, those shares that you bought will not be in your account until three days after your buy, so you will not be able to use those shares to cover your previous sell. So if you had sold those extra 1,000 shares, you would have been engaging in what is referred to as a "free-ride". That is, you sell something that you don't own. This is not the same as shorting, and it is not allowed. If you had done this, I'm confident that Schwab would have imposed a 90 day "cash up front" restriction on your account. This means that you will only be allowed to trade with your available cash. By the way, the "free-ride" is based on the time of transaction, not just on the day the transactions take place. So you cannot sell 2,000 shares of XYZ at 9:45 and buy 2,000 shares at 10:00. This will still be considered a free-ride. I believe if you have too many free-rides in a year, a brokerage can impose a lifetime cash-only restriction on you (but I'm not sure). I have had the following occur: I place a market order to purchase 1,000 shares of a stock at 9:45 The confirmation report is late. At 10:15, the stock has moved substantially in my favor, and still the confirmation is not back. I place an order to sell 1,000 shares at market (I get the message that I don't have shares in my account). The sell order goes through and is reported almost immediately. Finally the buy order report comes back. I am not guilty of a "free-ride", however, my account balances are screwed up (sometimes for days) because my buy order looks like a type II (margin order) and my sell order looks like a type I (cash). How can one short stocks in a fast moving market, when you don't really know if you are going to get shares or not? Call this number at Schwab -- 1-800-435-4000 -- to determine availability of shares to short. The number is listed on the online order confirmation screen. Good luck. Kevin