Replies to post #11791 on ANTs Software Inc. (fka ANTS)

[WhiteSahara]

It's an old legend that makes the rounds over and over and over again.

If you have a Margin Account, you can borrow funds to buy more shares than the cash balance in your account would normally allow, as your broker will lend you extra "margin" to trade. By the same token, in a Margin Account the brokerage can borrow against your shares, EVEN IF THEY ARE UP FOR SALE. Most brokerages won't borrow against your shares unless you are actually using your margin to purchase shares.

TD Ameritrade recently sent out documentation stating that they would notify their customers if their shares were being shorted. Their policy is typically to only short against those utilizing their margin.

If you want to absolutely lock up shares and make them unavailable for shorting against, you need a Cash Account. You can't borrow Brokerage margin money and conversely, no shares can be borrowed from a Cash Account to short against. The negative to a Cash Account is after a trade has been completed, the funds from the trade aren't usable for three trading days or until the trade has cleared and your money becomes available once again.

I'd recommend you call your broker to confirm all this

[olandug]

Yes. According to your margin account agreement, the brokerage you use can 'loan' out your shares.

But if they are for sale at a high enough price, it becomes impossible for the brokerage to do so.

Everyone should have their shares for sale in their brokerage account for $1 or more.


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