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No, firms are not required to loan stock. However, this is often a major
source of income. For example, many years Merrill has made more money from
stock loan fees that it did from commissions. Keep in mind that firms use
the public's stock certificates often for free to loan out and generate
substantial income. They can do this because the average customer is
ignorant as to this part of the business. Most professional traders
participate in earning interest on short stock. If you have substantial
stock holdings and or often trade in size on the short size you should ask
to participate in any stock loan activities involving your account. If they
loan out your stock certificates, you should get paid. If you short stock,
you should get paid. Many firms even have the gaul to charge customers
interest on short stock when in fact this is a cash flow credit into your
account and should be earning interest. So the firm is earning money twice
on your account, one on the stock loan fees and one on the interest they
have conned the customer into paying. It's all a giant rip off! They get
away with it because very few ever challenge it. All of life is a
negotiation.
Cheers,
Norman
Cheers,
Norman
----- Original Message -----
From: "John Nelson" <trader@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, October 07, 2001 12:57 AM
Subject: RE: [RT] VERY HEAVY BLK activity ON MSFT
>
> Are they required to loan stock? Since its held in street
> name I imagine that its at the firm's discretion. But what
> do I know?
>
> -- John
>
> > -----Original Message-----
> > From: Don Thompson [mailto:detomps@xxxxxxxxxxx]
> > Sent: Saturday, October 06, 2001 10:03 AM
> > To: realtraders@xxxxxxxxxxxxxxx
> > Subject: Re: [RT] VERY HEAVY BLK activity ON MSFT
> >
> >
> > Sounds like its time to call the SEC...
> >
> > Don
> > ----- Original Message -----
> > From: "Don Ewers" <dbewers@xxxxxxxxxxxxx>
> > To: <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Saturday, October 06, 2001 10:29 AM
> > Subject: Re: [RT] VERY HEAVY BLK activity ON MSFT
> >
> >
> > > I can confirm being unable to sell short with the responce from the
> > > brokerage firm "No stock available to loan on AMZN".
> > >
> > > After having shorted it three times from February to June,
> > (upper teens to
> > > the 10-12 area), my last two attempts to sell it as it rallied
> > back up in
> > > early July, were met with the above statement from Schwab?
> > > don ewers
> >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> >
> >
>
>
>
> To unsubscribe from this group, send an email to:
> realtraders-unsubscribe@xxxxxxxxxxxxxxx
>
>
>
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>
>
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