Have you check your credit facility with your broker?

CHASE

CHASE

Manager - Equity Analytics

Posts : 167
Equity Stars : 5219
Reputation : 8
Join date : 2011-05-01

Have you guys check your credit facility with your broker? I check with mine.
they said theres no exact limit. lets say if I have a 50k credit & if they run out of Liquid asset. they can force sell my stocks which i bought on credit. even Interest also 27%P/A

Oh damn it. this'll be another disaster Evil or Very Mad

invest-abc

invest-abc

Manager - Equity Analytics

Posts : 283
Equity Stars : 5430
Reputation : 35
Join date : 2011-01-31
Location : Colombo

CHASE wrote:Have you guys check your credit facility with your broker? I check with mine.
they said theres no exact limit. lets say if I have a 50k credit & if they run out of Liquid asset. they can force sell my stocks which i bought on credit. even Interest also 27%P/A

Oh damn it. this'll be another disaster

What?? 27% p.a???..who is your broker? That interest rate is absolutely absurd.

CHASE

CHASE

Manager - Equity Analytics

Posts : 167
Equity Stars : 5219
Reputation : 8
Join date : 2011-05-01

Per annum. Bartleet Sad

hawklk

hawklk

Senior Manager - Equity Analytics

Posts : 371
Equity Stars : 5575
Reputation : 24
Join date : 2011-02-10

CHASE wrote:Have you guys check your credit facility with your broker? I check with mine.
they said theres no exact limit. lets say if I have a 50k credit & if they run out of Liquid asset. they can force sell my stocks which i bought on credit. even Interest also 27%P/A

Oh damn it. this'll be another disaster

That is what all this SEC directive all about. Brokers should manage it properly without creating losses to the clients. They should properly distribute the credit among the clients and when they feel that the liquid level is not favorable, selling of the shares should be managed properly with minimum or no losses to the client. This is extra work and need some professionalism. But I feel this will not happen. Force selling will be carried out blindly.

This is my understand of this SEC credit directive. Am I right or wrong?

CHASE

CHASE

Manager - Equity Analytics

Posts : 167
Equity Stars : 5219
Reputation : 8
Join date : 2011-05-01

hawklk wrote:

CHASE wrote:Have you guys check your credit facility with your broker? I check with mine.
they said theres no exact limit. lets say if I have a 50k credit & if they run out of Liquid asset. they can force sell my stocks which i bought on credit. even Interest also 27%P/A

Oh damn it. this'll be another disaster

That is what all this SEC directive all about. Brokers should manage it properly without creating losses to the clients. They should properly distribute the credit among the clients and when they feel that the liquid level is not favorable, selling of the shares should be managed properly with minimum or no losses to the client. This is extra work and need some professionalism. But I feel this will not happen. Force selling will be carried out blindly.

This is my understand of this SEC credit directive. Am I right or wrong?

Yes agreed with you. but then there's no reason to boost the market. this will only helpful to minimize force selling & free-fall.

Hiru

Hiru

Manager - Equity Analytics

Posts : 274
Equity Stars : 5330
Reputation : 31
Join date : 2011-04-24

I think brokers want to get advantage out of us. That is why they have applied to SEC, but SEC has been wise not to allow these buggers to suck the poor investors hard earned money. Now brokers try to sell an idea that this is not enough to drive the market up as t+5 force selling is still applicable while some firms are lack of liquidity within the firm to allow credit.

So, please be wise not to trap your self with credit as well as of the quick upward run in the market because you have to pay price sooner or later.

maalinda

maalinda

Manager - Equity Analytics

Posts : 254
Equity Stars : 5350
Reputation : 15
Join date : 2011-01-27

The Best way is dont use credit. stick with your money... keep a safe limit.. 10% - 20% max when you use credit and always make sure you can pay and settle it IF something goes wrong.

brokers are culprits.

CHASE

CHASE

Manager - Equity Analytics

Posts : 167
Equity Stars : 5219
Reputation : 8
Join date : 2011-05-01

Actually
there’s no any credit facility. It’s only a small relief from T+5 force
selling. Better to stay away from the
credit. Even if anyone bought at credit better to settle ASAP.

charith82

charith82

Manager - Equity Analytics

Posts : 114
Equity Stars : 5015
Reputation : 8
Join date : 2011-07-22

iam agree with hawklk and CHASE. for me this rule is useless. SEC and CSE always trying to minimize there responsibilities and and try to put more responsibility on brokers. it is impossible to calculate liquid assert daily or monthly basis. So broker can easily force sell our shares saying they are not within required liquid assert level. As hawklk saying its like blind force selling. No one take legal action against broker firm coz of lack of information. So i dont understand why ppl jumping on this decision and trading hugely for credits. saddest thing is some ppl do trades for credits even without knowing exact meaning of the SEC decision. So this is not the time to be happy and do crazy buying. wait for ur brokers comments on this decision and understand the reality.

CHASE

CHASE

Manager - Equity Analytics

Posts : 167
Equity Stars : 5219
Reputation : 8
Join date : 2011-05-01

Yes Charith, big guys make kabaragoya to talagoya. & People jump & bought on credit without checking anything. Evil or Very Mad

Antonym

Antonym

Vice President - Equity Analytics

Posts : 1090
Equity Stars : 7644
Reputation : 275
Join date : 2011-02-09

Before this SEC notification, it was compulsory for brokers to force-sell at T+5. Every day was a 'force selling day'. Eliminating the need for force-selling is the most significant benefit of the SEC's decision.

Important: All of us are not automatically entitled to credit beyond T+3.

Each of us needs to speak to our brokers and find out whether they are allowing us any extra credit (beyond the T+3). If so,
(a) What is my credit limit - Upto how much can buy?
(b) What is the credit period - Before how many days do I need to pay?
(c) What is the interest rate that will be charged?
(d) What will happen if I do not pay on time?

CHASE

CHASE

Manager - Equity Analytics

Posts : 167
Equity Stars : 5219
Reputation : 8
Join date : 2011-05-01

Antonym wrote:Before this SEC notification, it was compulsory for brokers to force-sell at T+5. Every day was a 'force selling day'. Eliminating the need for force-selling is the most significant benefit of the SEC's decision.

Important: All of us are not automatically entitled to credit beyond T+3.

Each of us needs to speak to our brokers and find out whether they are allowing us any extra credit (beyond the T+3). If so,
(a) What is my credit limit - Upto how much can buy?
(b) What is the credit period - Before how many days do I need to pay?
(c) What is the interest rate that will be charged?
(d) What will happen if I do not pay on time?

Yes Antonym, before we jump to water we should check how deep it is.
Dear All can you please share your broker name & their facilities for Antonym above questions. I gave the bartleet above.

Dinith

Dinith

Equity Analytic

Posts : 27
Equity Stars : 4925
Reputation : 7
Join date : 2011-07-12

I don't understand why small-time investors like us want to buy on credit and are prepared to pay an interest on it.
How are we supposed to make a profit with that line of thinking?
Why spend money that we don't have and risk everything?

Market.Player

Market.Player

Senior Manager - Equity Analytics

Posts : 374
Equity Stars : 5317
Reputation : 22
Join date : 2011-08-14
Age : 59
Location : Thailand

Today my broker has increased my buying power to another 5 Mn.

Hiru

Hiru

Manager - Equity Analytics

Posts : 274
Equity Stars : 5330
Reputation : 31
Join date : 2011-04-24

Market.Player wrote:Today my broker has increased my buying power to another 5 Mn.

So, you are not a small player

Sponsored content

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Latest topics

Have you check your credit facility with your broker?

1 Have you check your credit facility with your broker? Wed Aug 17, 2011 12:56 pm

CHASE

2 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 1:16 pm

invest-abc

3 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 1:30 pm

CHASE

4 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 1:39 pm

hawklk

5 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 2:49 pm

CHASE

6 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 2:52 pm

Hiru

7 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 3:40 pm

maalinda

8 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 4:02 pm

CHASE

9 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 4:15 pm

charith82

10 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 4:30 pm

CHASE

11 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 4:31 pm

Antonym

12 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 4:38 pm

CHASE

13 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 9:00 pm

Dinith

14 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 9:11 pm

Market.Player

15 Re: Have you check your credit facility with your broker? Wed Aug 17, 2011 9:14 pm

Hiru

16 Re: Have you check your credit facility with your broker?

Sponsored content

New topics