I have read on some other forums that people are calling their brokers and isolating their shares. This is supposed to block the brokerage from utilizing these shares for shorting purposes. Now I don't know if this is true, but I will be calling my brokerage tomorrow to find out if this is so. If anyone knows about this please respond. Thnx
surfer000, I always thought they needed to have your permission before they can loan them out to be shorted.
Had heard that keeping GTC sell orders set would keep shorts from borrowing my shares. This is not true. Brokers still loan your shares for shorting. Here's what I found out: If you have a cash account you can request that your entire portfolio be restricted from share borrowing. You must call and request this. If you do not request it, assume that your broker is "lending" your shares for shorting.
If you have a margin account, you can typically have one or two positions isolated from the rest of your portfolio to prevent your broker from lending those shares for shorting. The rest of your porfolio will still be available to your broker for shorting.
I requested that my SIRI shares and one other stock position be isolated from the rest of my portfolio. I do not want my SIRI shares to be borrowed for shorting. I thought that I had prevented this by keeping my stocks for sale, but as I stated this does not do it. AFAIK, calling your broker is the only way to stop the borrowing and shorting of your Shares.
When your order is completed, you will see that SIRI will be placed in a separate box on your account web page from your other holdings.
When you signed your brokerage agreement, you agreed to allow your broker to borrow or lend to others your shares for shorting. Wasn't that nice of them? Even though you are unaware of it, you have already given them your consent to short your shares! I know you will call your broker tomorrow, right John?
Broker called this morning and said that he cannot isolate any stocks from my margin account to prevent them from being loaned for shorting. He explained that there is a new system called auto sweep that will not allow any positions to be separated from an account as they had done in the past. They are automatically redirected back to margin account status by the auto sweep.
The alternative is to open a separate cash account and place any shares you do not want loaned for shorting in that separate account. Of course, you could also change the whole account into a cash account, but then you would be prohibited from shorting Martha Stewart or anything else.
deewcom, I will call now, but the last time they called me to ask if they could barrow my shares in another company. I said yes then, because I did not know any better, it seemed to be a good enough deal. That was almost ten years ago, I know better now, not to let them do it at least with SIRI.
Deewcom, I am guessing your broker is Scottrade.
Another option is to send your shares directly to the transfer agent, where I don't believe they can be borrowed. You have to nag most brokers to do this and usually fill out a form.
I have cash accounts with Ameritrade and E*trade. Are they able to lend my shares too? If so I'll call in the morning to see what I can do to prevent it.
Are you telling me that I have another option? That Scottrade can move my shares to a (the, their, my) transfer agent? And my broker did not tell me about this third option?
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