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I think my broker (LFG) just cost me about $60, but before I let him know
what I thought about it, I wanted to make sure he didn't have a case.
On Monday last week, I instructed my broker to roll my $20K TBill which was
to mature on Thu. into the biggest TBill he could. At that time, my account
was cash debit $3K and thus had a liquidating value of $17K. ($20K TBill
value less $3K cash debit). I expected to get rolled into a $15K TBill since
at maturity of the $20K TBill, my account would have $17K cash and a $15K
TBill would cost about $14.8K. BTW, there are no options in my account and
my margin requirement is under $4K for the futures positions I hold.
On Thursday, I discovered I had been rolled into a $10K TBill. When I
inquired, my broker responded:
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When you ROLLED the bill, he cannot break it down in increments of $
5,000. The minimum is $ 10,000. SO when you instructed me to roll the
bill for as much as I could, that is what he did.
However, if you just would have let the bill expire without rolling, you
could have purchased a $15K bill the following week.
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Does this explaination make sense to anyone? Especially you brokers out
there. What I'm reading is that you cannot let a $20K TBill expire and buy a
$15K TBill *on the same day* (ie a ROLL) because it involves a $5K
increment?
This sounds like a bunch of baloney to me. But before I gave my broker a
piece of my mind I thought I would first check with all you guys just in
case there might actually be something to that 'no $5K increment on a TBill
ROLL' story. And I would feel stupid ripping my broker if it was true.
Thanks guys,
Scott Hoffman
Issaquah, WA
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