Need help to Understand this – Credit Clearance and Broker Credit Limits

ADP

ADP

Manager - Equity Analytics

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Join date : 2011-07-09

Can anybody help me understand how exactly does easing(or completely abolishing) the credit limitation rules (T+5) and borrowing limits of 50% of the portfolio help in the long term health of the stock market?

Is his a short term fix to help us get through the credit clearance deadlines of September and December?
Or is this a measure to safeguard the interest of the broker community from possible default on credit outstanding?

windi5

windi5

Moderator

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Join date : 2011-05-21

All my credits had been cleared end of the June, i didnt know that till i get the selling note few days after. Now i dont have any credits, credit facility has been stopped on my account by my broker firm.Im glad about that,now i can mannage my own money and do the business without any fear of credit clearance or any thing.When i had credits i acted like a monkey touching everything,eve very hot shares,ultimately making my fingers drastically burning.

SECs intention was to stop any credit bubble created in the mkt by these credits. the way the mkt appreciated,manly retailers credit, it could happen in any time. We all know what the credits did for American Economy.

ADP

ADP

Manager - Equity Analytics

Posts : 106
Equity Stars : 4823
Reputation : 13
Join date : 2011-07-09

Thanks windi5 for sharing you experience.

Today was a awesome day hope you guy’s made a buck or two, I my self I’m watching for my exit point in my remaining small portfolio.

Back to the subject sadly no replies to my question.

Even if the regulator does change the rules what does it actually mean to us, the small time investor? You would be able to buy more and hold on to it for longer. This I feel is not necessarily something good. You would see the “monkey effect” windi5 described. You could get into debt more to chase the next big run – hot stock. And when they hook you on to junk you can hold their junk with your new found holding power. If you had to rely on your own money and you had to pay within a short period for what you bought you would be more careful where you put your money.

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Need help to Understand this – Credit Clearance and Broker Credit Limits

1 Need help to Understand this – Credit Clearance and Broker Credit Limits Fri Jul 29, 2011 8:08 am

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2 Re: Need help to Understand this – Credit Clearance and Broker Credit Limits Fri Jul 29, 2011 8:34 am

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3 Re: Need help to Understand this – Credit Clearance and Broker Credit Limits Sat Jul 30, 2011 12:49 am

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