can you short stocks under $5?

Discussion in 'Order Execution' started by Gordon Gekko, Jun 19, 2002.

  1. is it possible to short stocks under $5? i've heard you can't and i've heard you can.
  2. I think it is up to you broker.

    When ADSX went to $2+, IB let you short it at that time.
  3. i can short under $5 but have to use 100% margin
  4. rs7


    firm here in florida called all-tech....i believe pretty much all they do is add liquidity to their own ecn. they buy sell and short stocks like palm, wcom, etc....maybe they are technically market makers (though the traders are prop traders)..
  5. They use the Attain ECN.
  6. Beer Man

    Beer Man



    It all just depends on your broker. If you use a broker like Datek then no, you can not short stocks under $5. Datek's margin rules do not let you margin stocks under $5. When you are shorting you are using your margin. Therefore Datek will not let you short stocks under $5 but Datek sucks. Most direct access brokers who really appeal to day traders will let you short stocks under $5.

    Anything to do with Alltec (Harvey Houtkin) is always an inch away from disappearing into thin air.
  9. Beer Man

    Beer Man

    i guess that sums it up ......may your next one, be a cold one-Beerman
  10. Market XT also in limbo

    By Isabelle Clary
    Senior Staff Reporter
    MarketXT, the electronic communications network that roared on Nasdaq's SuperSoes auto-execution system, has stopped trading since July 30, soon after switching clearing firms to Penson Financial Services from SWS Securities.

    A spokeswoman for MarketXT said the stoppage was due to a technical problem. "As the separation with the E-Trade businesses continues, we are moving our data center and server systems to an independent location....We are opting to keep the ECN closed until all technical issues are resolved."

    According to industry sources, MarketXT owed SWS Securities $2 million in unpaid fees when it made its move to Penson. This prompted SWS to complain to regulators responsible for ensuring that U.S. broker-dealers comply with rules, such as net capital requirements, sources said.

    SWS Securities, to which MarketXT had switched from UBS PaineWebber seven months ago, declined comment.

    In June, E-Trade acquired Tradescape Corp., the parent of MarketXT, Momentum Securities, an electronic broker for professional traders, Tradescape Securities, a direct-access broker for active online traders, and Tradescape Technologies. The merger, valued at up to $280 million, did not include MarketXT.

    "E-Trade has auditors currently going over the Tradescape books," a spokeswoman for E-Trade confirmed, adding that this was not an uncommon practice following a merger.

    Tradescape CEO Omar Amanat, who had taken the position of head of institutional trading at E-Trade, recently left the company to return to MarketXT. His move coincided with E-Trade's reassessment of the value of the Tradescape acquisition.

    The E-Trade spokeswoman also said the company never comments on staff changes.

    E-Trade bought Tradescape for $100 million in stock, plus up to $180 million in stock, if Tradescape topped profits targets. E-Trade, traded on the New York Stock Exchange, had expected Tradescape to contribute 10 percent to earnings growth in 2003. Softbank is a major investor in both Tradescape and E-Trade.

    MarketXT, the first ECN to join SuperSoes in December 2001, quickly soared to the top spot among SuperSoes liquidity providers. But soon after E-Trade's acquisition of Tradescape, MarketXT saw its volume drop, which industry sources said reflected the fact that Momentum Securities was no longer sending order flow there. A number of former Momentum clients also claim that the broker owes them money for past trading activity, sources said.
    #10     Aug 10, 2002