Why Locking Up Shares with GTC orders is a Myth:
moneym8ker
Thursday, 07/28/16 01:43:35 PM
Re: None
Post # 66137 of 66205
No sell order at ANY PRICE "locks up" your shares.
Do you have a "margin account" with your brokerage? If you do? Then you accepted an agreement in the account sign up process and your SFOR shares (or any other shares) can be borrowed from you and loaned out.
This is TRUE FOR ALL ONLINE BROKERAGES.
Have a cash account only with no margin account enabled. Then your SFOR shares are safe from being borrowed.
Not convinced that the "lock your shares up with GTC orders" is just a myth?
Contact your broker (etrade, tDA, scottrade, fidelity, etc) and do two things:
1.) determine if you're cash account only or if you've enabled margin trading.
2.) request a "Loan Exempt Restriction". This restriction exempts your shares...all shares in the account, from being loaned out.
Still not convinced...
Read FINRA RULE 4314-4330. The rules specifically cover the borrowing and loaning of shares held in accounts of online brokerages as well as brick and mortar brokerages.
GTC orders DO NOT LOCK UP YOUR SFOR SHARES.
So why is it important to dispel this myth?
Simple...if you believe the myth, and you've done nothing more than put a GTC order in for your SFOR shares then YOUVE ACTUALLY DONE NOTHING AND YOUR SHARES ARE STILL BEING BORROWED AND LOANED OUT.
Any trader, on any board who perpetuates this myth does more harm than good.
CORRECTLY "locking up your shares" HURTS "SHORTY".
Incorrectly locking up your SFOR shares ACTUALLY HELPS SHORTY!
How? How does incorrectly locking up your shares HELP THE VERY GROUP OF TRADERS YOU DONT WANT TO BE HELPING IF YOURE LONG SFOR?
It helps them because you only THINK you're locking up shares...but you haven't locked up anything. So now, thinking you're shares are safe from shorty, they're not at all safe and shorty gets to borrow borrow borrow all day long with you blind to the fact that you're actually hurting yourself.
Get the facts...repeat the facts...dispel the myth AND ACTUALLY MAKE YOUR LONG SHARES STRONGER BECAUSE THEY ARE OFF THE SHORTS TABLE!
riskreward007
Thursday, 07/28/16 06:36:49 PM
Re: moneym8ker post# 66144
Post # 66211 of 66214
CORRECT INFORMATION ON LOCKING UP YOUR SFOR SHARES:
1) CASH ACCOUNT: DO NOTHING. Your shares are ALREADY LOCKED UP and can't be loaned out by your broker.
2) MARGIN ACCOUNT: Complete a LOAN EXEMPT RESTRICTION form that's available from your online broker to prevent the loaning out of your shares.
THANK YOU FOR MAKING THIS ABUNDANTLY CLEAR!
I REALLY HOPE THAT PEOPLE HERE WILL PAY ATTENTION TO THIS, AND STOP PERPETUATING THE MYTH OF: LOCKING UP YOUR SHARES WITH GTC ORDERS (WHICH DOES NOTHING TO PREVENT THEM FROM BEING LOANED OUT).
I SEE THIS MYTH PERPETUATED CONSTANTLY ON PRACTICALLY EVERY IHUB BOARD I VISIT.
moneym8ker Friday, 07/29/16 03:57:15 PM
Re: Plato post# 66669
Post # of 66681
Plato...
You AND OTHERS here who continue, DESPITE PROOF OTHERWISE to claim that a GTC sell "locks up" your shares from being borrowed and loaned out from shorts are part of the problem...certainly not the solution.
In fact, I believe it's actually SHORTS who propagate this myth to their own favor.
Let's say I'm a short.
I tell longs...any long who will listen, to simply lock up their shares with GTC sell orders. Those longs who believe it, don't research it...they enter in GTC sell orders thinking they've read good advice...when in fact, they've done nothing.
It'd be like a burglar saying "all you have to do to keep burglars out is cast a spell over your doors and windows" knowing full well, locks, not spells, will keep a burglar out.
Too many retail folks with online brokerage accounts holding hundreds of millions of "spell casted" shares hold this stock which is why you see a purely technical attack on SFOR like we saw today:
Hit resistance at $0.0040, technicians shorted, stock fell to $0.0030.
If you have a cash account, your shares cannot be borrowed.
If you have a margin account, contact your online brokerage and request a LER (loan exempt restriction)
That's the ONLY WAY to lock up shares.
All others who continue this GTC with high sell orders myth...you're to blame for keeping your millions of shares available to be borrowed, loaned out, and then shorted.
moneym8ker
Thursday, 07/28/16 01:43:35 PM
Re: None
Post # 66137 of 66205
No sell order at ANY PRICE "locks up" your shares.
Do you have a "margin account" with your brokerage? If you do? Then you accepted an agreement in the account sign up process and your SFOR shares (or any other shares) can be borrowed from you and loaned out.
This is TRUE FOR ALL ONLINE BROKERAGES.
Have a cash account only with no margin account enabled. Then your SFOR shares are safe from being borrowed.
Not convinced that the "lock your shares up with GTC orders" is just a myth?
Contact your broker (etrade, tDA, scottrade, fidelity, etc) and do two things:
1.) determine if you're cash account only or if you've enabled margin trading.
2.) request a "Loan Exempt Restriction". This restriction exempts your shares...all shares in the account, from being loaned out.
Still not convinced...
Read FINRA RULE 4314-4330. The rules specifically cover the borrowing and loaning of shares held in accounts of online brokerages as well as brick and mortar brokerages.
GTC orders DO NOT LOCK UP YOUR SFOR SHARES.
So why is it important to dispel this myth?
Simple...if you believe the myth, and you've done nothing more than put a GTC order in for your SFOR shares then YOUVE ACTUALLY DONE NOTHING AND YOUR SHARES ARE STILL BEING BORROWED AND LOANED OUT.
Any trader, on any board who perpetuates this myth does more harm than good.
CORRECTLY "locking up your shares" HURTS "SHORTY".
Incorrectly locking up your SFOR shares ACTUALLY HELPS SHORTY!
How? How does incorrectly locking up your shares HELP THE VERY GROUP OF TRADERS YOU DONT WANT TO BE HELPING IF YOURE LONG SFOR?
It helps them because you only THINK you're locking up shares...but you haven't locked up anything. So now, thinking you're shares are safe from shorty, they're not at all safe and shorty gets to borrow borrow borrow all day long with you blind to the fact that you're actually hurting yourself.
Get the facts...repeat the facts...dispel the myth AND ACTUALLY MAKE YOUR LONG SHARES STRONGER BECAUSE THEY ARE OFF THE SHORTS TABLE!
riskreward007
Thursday, 07/28/16 06:36:49 PM
Re: moneym8ker post# 66144
Post # 66211 of 66214
CORRECT INFORMATION ON LOCKING UP YOUR SFOR SHARES:
1) CASH ACCOUNT: DO NOTHING. Your shares are ALREADY LOCKED UP and can't be loaned out by your broker.
2) MARGIN ACCOUNT: Complete a LOAN EXEMPT RESTRICTION form that's available from your online broker to prevent the loaning out of your shares.
THANK YOU FOR MAKING THIS ABUNDANTLY CLEAR!
I REALLY HOPE THAT PEOPLE HERE WILL PAY ATTENTION TO THIS, AND STOP PERPETUATING THE MYTH OF: LOCKING UP YOUR SHARES WITH GTC ORDERS (WHICH DOES NOTHING TO PREVENT THEM FROM BEING LOANED OUT).
I SEE THIS MYTH PERPETUATED CONSTANTLY ON PRACTICALLY EVERY IHUB BOARD I VISIT.
moneym8ker Friday, 07/29/16 03:57:15 PM
Re: Plato post# 66669
Post # of 66681
Plato...
You AND OTHERS here who continue, DESPITE PROOF OTHERWISE to claim that a GTC sell "locks up" your shares from being borrowed and loaned out from shorts are part of the problem...certainly not the solution.
In fact, I believe it's actually SHORTS who propagate this myth to their own favor.
Let's say I'm a short.
I tell longs...any long who will listen, to simply lock up their shares with GTC sell orders. Those longs who believe it, don't research it...they enter in GTC sell orders thinking they've read good advice...when in fact, they've done nothing.
It'd be like a burglar saying "all you have to do to keep burglars out is cast a spell over your doors and windows" knowing full well, locks, not spells, will keep a burglar out.
Too many retail folks with online brokerage accounts holding hundreds of millions of "spell casted" shares hold this stock which is why you see a purely technical attack on SFOR like we saw today:
Hit resistance at $0.0040, technicians shorted, stock fell to $0.0030.
If you have a cash account, your shares cannot be borrowed.
If you have a margin account, contact your online brokerage and request a LER (loan exempt restriction)
That's the ONLY WAY to lock up shares.
All others who continue this GTC with high sell orders myth...you're to blame for keeping your millions of shares available to be borrowed, loaned out, and then shorted.
