T+3

From: "David Wilkinson" <>
Subject: Re: hg mimf2006
Date: Thursday, January 12, 2006 2:30 PM

Hmmm.. Could be a good point. Even if you are signed on with two brokers,
Arne, how long does it take to realise the money after the sale and move it
to the other broker? Can you do it in time for a sell and buy on the same
day?


I hope this doesn't make the "Happy Guy" unhappy.
If Arne sold IGN at the open, the money won't be available until next
Wednesday if the market is open on Martin L. King Day, next Thursday if it's
not. The only way around this is if he bought the Profunds at Scottrade and
paid the commission. If he did this, he couldn't sell at a loss until
settlement.

"How do I calculate when the three-day settlement cycle begins and ends?"
The first day of the three-day settlement cycle starts on the business day
following the day you purchased or sold a security. For example, let's say
you bought a stock on Friday at anytime during the day. Saturday and Sunday
are not considered business days, so the three-day clock doesn't start
running until Monday. Your payment or check must arrive at your broker's
office by the close of business on Wednesday.

Generally, those days when the stock exchanges are open are considered
business days. Always check with your broker to make sure that you
understand when your payment or securities are due.

Re: T+3

"Ed" <> wrote in message
news:
>
> From: "David Wilkinson" <>
> Subject: Re: hg mimf2006
> Date: Thursday, January 12, 2006 2:30 PM
>
> Hmmm.. Could be a good point. Even if you are signed on with two brokers,
> Arne, how long does it take to realise the money after the sale and move
> it
> to the other broker? Can you do it in time for a sell and buy on the same
> day?
>
>
> I hope this doesn't make the "Happy Guy" unhappy.
> If Arne sold IGN at the open, the money won't be available until next
> Wednesday if the market is open on Martin L. King Day, next Thursday if
> it's
> not. The only way around this is if he bought the Profunds at Scottrade
> and
> paid the commission. If he did this, he couldn't sell at a loss until
> settlement.
>
> "How do I calculate when the three-day settlement cycle begins and ends?"
> The first day of the three-day settlement cycle starts on the business day
> following the day you purchased or sold a security. For example, let's say
> you bought a stock on Friday at anytime during the day. Saturday and
> Sunday
> are not considered business days, so the three-day clock doesn't start
> running until Monday. Your payment or check must arrive at your broker's
> office by the close of business on Wednesday.
>
> Generally, those days when the stock exchanges are open are considered
> business days. Always check with your broker to make sure that you
> understand when your payment or securities are due.
>
>
He could do it in the UK with brokers like mine, T D Waterhouse UK. You can
buy and sell with T+3, T+5 or T+10 at your choice. So, he could sell on Day
1 with at Broker "A" at T+3 and the broker would have his money in 3 working
days. It would then take him another 3 WDs to move the money electronically
to his bank account. I know it actually takes about 2 nanoseconds but UK
Banks are allowed to get away with a profitable scam of pretending it takes
3 days, as it used to when they sent paper cheques through the post. This
gives the Banks three days interest on all the money going through their
clients' accounts. Then he sends a cheque to Broker "B" from whom he bought
the other security on Day 1 at T+10. This would enable him to sell at one
broker and buy at another on the same day with the "same" money, if he
lived in the UK.

As it is, being in the US, does Arne have anything other than T+3 to permit
the transaction? If not, then it can't happen until 3 WDs later, unless I
have missed a point.

David


>

Re: T+3

In the past, my rule (my rule) was to permit transfers
(cash, securities, whatever) between brokers, with 5
business days "dark." It meant that your funds were
essentially inaccessible for 5 days while funds were
"in transit" between brokers.

David Wilkinson wrote:
>

Re: T+3

My take: Arne is trying to "game the system."
I would not put up with it 2003 - he tried to buy
a mutual fund after close of business. When I
disallowed the transaction, he quit the game.

David Wilkinson wrote:

Re: T+3

"David Wilkinson" <> wrote

> As it is, being in the US, does Arne have anything other than T+3 to
> permit the transaction? If not, then it can't happen until 3 WDs later,
> unless I have missed a point.
>
> David

It would actually be the fourth trading day after the sale. The day of the
sale doesn't count and then the next 3 days don't count, on the fourth day
the money would be available but it would be at Scottrade, not in a Profunds
account.

I think Arne should have just stayed with Profunds instead of buying this
ETF and selling it. That's what caused this problem. The markets are closed
on Monday so his money won't be available until Thursday but it'll be at
Scottrade. Mark's 5 day rule seems reasonable. If you adopt this rule, it
gets worse. When did Arne sell the Profund to buy the ETF. It couldn't
happen on the same day even if it were in cash at Profunds. He would first
have to get the money to Scottrade before buying the ETF. In the context of
the mimf contest, that would make his ETF purchase illegal.