Backup Broker

J

jj_jere@hotmail

If my first brokerage system goes down and I hold 1000 shares of ABC and I want to sell. I go to my backup broker and sell these shares. Question: Do i have to do two more trades to get my statements even or can I inform the brokers and they will work it out?
JJ
 
I can't imagine your brokers would consider it worth their bother settling the trade between them. Your primary broker isn't obligated to do anything about it; system outages are just part of the business. What I've done to save the spread in cases such as this is trade with myself, using an ECN that isn't near the market price at the time (assuming the market isn't moving too fast; I've even waited until after hours to settle trades like this)

I'm not sure, but I believe that being short in one account and long in another is actually illegal; I think you would be considered short against the box.
 
I'm pretty sure that being long in one account and short in the other is actually ok as long as you are not doing it for tax purposes.

What is ILLEGAL - is trading with yourself. I had this question not too long ago because I often trade in a secondary account if I have probelms with my first account. I had actually made several trades after hours (just like you) then I inquired about it and was advised by the SEC and a lawyer that trading with yourself is actually a violation of trading rules. People have done this in the past to print trades at certain prices which could be construed as manipulation (even thou it isn't). As a result, I would recommend that you don't trade with yourself any longer. (you don't need the hassle of a SEC investigation).
 
IANAL, but I think both shorting against the box and trading with yourself are illegal. You can do an ACATS transfer from one broker to another, but I'm not sure if it's worth the hassle, depends on your trading style I guess (how soon you need the funds vs. commission amount.)

Ask your brokers if they do ACATS transfers, how much it costs, how long it takes etc.

voodoo
 
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