Is this trading strategy illegal or against some brokers policy?

What you described does not make sense in the slightest. If you shorted and got filled then obviously your broker located borrow for you. Legal? Ticked. You said you then went long an equal number shares. Legal? Ticked. You basically ended up with net zero exposure (not sure why you would do that in the first place as you had nothing to gain whatsoever). But legal? Ticked. You then sold the long position again (your broker says thanks for the double commission you paid in exchange for nothing) and ended up again with short exposure. If you did that with separate brokers (long with one broker and short with another) then there is nothing whatsoever illegal about that. So yes, I call you an idiot because you provided your broker (s) with several free lunches, lol. And your example has nothing WHATSOEVER to do with this thread. And short selling was totally legal and accepted business practice well before the financial crisis. Maybe you should refrain from participating in threads you seemingly have no idea of what the topic is actually about. Enough said.

BONECRUSHER said:
You do realize split accounts can help a trader short a crashing stock. Back in 2008 when the vix was over 80, I had a difficult time getting shares to short so I would continue to place short orders over and over until I was filled. I then placed an order to go long equal shares in a separate account. About 20 minutes before the close the market would selloff like clockwork and all I had to do was close the long position. The shares to short were never available during this volatility so I had to improvise. I did this with SPY as well because shorting SPY at that particular time was a terrible fill compared to just selling SPY. Anyways, I got around the rules and I'm pretty sure it wasn't legal. Please tell me why I couldn't do this in one account rather then two? How come they wouldn't let me do this? Why did they say it was illegal? Were they lying? Shorting and manipulation were frowned upon back then and still are...just wait for the next big decline to hear it all again. This is related to the issue because I thought the sequence of closing out both positions might be the violation... like my experience with my equities broker. And like I said, currencies are a different world so who knows. So what is your opinion about how I used two different accounts in 2008? Sound legal to you? And once again you are a confusing fellow. You care so much about newbies and others getting confused by idiots and yet so quick to put people down. How do you care so much and then suddenly rip people a new one. I'm trying to be nice and not call you anything because I didn't make it clear that I thought the OP's violation could be some other variable. So, to be clear, you are calling me one of the idiots...right?
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It's deceptive but not illegal at all. If your broker Is dumb enough to bust your account out several times or if you find enough new brokers after each bust then go ahead and take him/them for a ride. But don't cry if they see through it and bam you as well as force you into a settlement.

tysonmoch123 said:
Guys all i have asked was for some advise and help since i am new and uneducated in this topic, i will give you a better understanding of how i would be trading.

supose there is me and my friend john and we talk everyday we both pick the same currency and do the research together and john says i think its gonna go up and i say its gonna go down so we always bet against eachother now using the leverage i buy 250 which gives me 1 million and john dows the same thing over the weekends, the market opens on monday and it is 0.15+ so john has lost money since he has gone position short and has lost 0.15+ the spread and weekend rollover commision and i have gained that, the next week the same thing happens but the market goes 0.75- which means i have lost my 2500 and my account is not in minus 5000 plus thr fees, the broker has got a policy of no negative balance so u only lose what u have in ur account at the time and john is now made a profit of 7500 - the spread and fees, so in other words john has profited on the second week and has lost on the first week, now the market risk is still there for john and me because if the market opens under 0.25 we lose on spread on both accounts and weekend rollover so shouldnt this be normal? also john has his own credit card that he deposit funds from and places his bets himself but john is always talking to me on regular bases. all i wanna know is this illegal? if it is what would this come up in under their policy?
thank you
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tysonmoch123 said:
Guys all i have asked was for some advise and help since i am new and uneducated in this topic, i will give you a better understanding of how i would be trading.

supose there is me and my friend john and we talk everyday we both pick the same currency and do the research together and john says i think its gonna go up and i say its gonna go down so we always bet against eachother now using the leverage i buy 250 which gives me 1 million and john dows the same thing over the weekends, the market opens on monday and it is 0.15+ so john has lost money since he has gone position short and has lost 0.15+ the spread and weekend rollover commision and i have gained that, the next week the same thing happens but the market goes 0.75- which means i have lost my 2500 and my account is not in minus 5000 plus thr fees, the broker has got a policy of no negative balance so u only lose what u have in ur account at the time and john is now made a profit of 7500 - the spread and fees, so in other words john has profited on the second week and has lost on the first week, now the market risk is still there for john and me because if the market opens under 0.25 we lose on spread on both accounts and weekend rollover so shouldnt this be normal? also john has his own credit card that he deposit funds from and places his bets himself but john is always talking to me on regular bases. all i wanna know is this illegal? if it is what would this come up in under their policy?
thank you
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why dont you stop asking about it and just do it then post the results.
if you do get busted just play dumb and theyll let you go.
 
volpunter said:
What you described does not make sense in the slightest. If you shorted and got filled then obviously your broker located borrow for you. Legal? Ticked. You said you then went long an equal number shares. Legal? Ticked. You basically ended up with net zero exposure (not sure why you would do that in the first place as you had nothing to gain whatsoever). But legal? Ticked. You then sold the long position again (your broker says thanks for the double commission you paid in exchange for nothing) and ended up again with short exposure. If you did that with separate brokers (long with one broker and short with another) then there is nothing whatsoever illegal about that. So yes, I call you an idiot because you provided your broker (s) with several free lunches, lol. And your example has nothing WHATSOEVER to do with this thread. And short selling was totally legal and accepted business practice well before the financial crisis. Maybe you should refrain from participating in threads you seemingly have no idea of what the topic is actually about. Enough said.
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You said before that holding boxes was illegal. Now you are saying it's legal but pointless. So it's legal now after 8 months?

volpunter said:
ok but even that made very little to no sense given the fact that borrowed shares could have been recalled at any point in time. Worse yet, you could have gotten notice that your shares are gonna get called and unless you act your broker will actually close the short for you and you will end up with sudden, unexpected exposure. Fact remains, this "scheme" was purely intended for abusive purposes either by brokers or for tax avoidance reasons which is precisely why SEC made such activity illegal.
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http://www.elitetrader.com/et/index.php?threads/please-tell-me-the-term-for.288210/page-3

Are you actually just a troll who likes to argue?
 
whatever, this is just a small time scam against a 400 to one bucket shop which amounts to nothing more than how to win if you get a "Buy one get one free" coupon from your local burger stand.

Negative balances are hard to collect and bad publicity for the firm
 
volpunter said:
What you described does not make sense in the slightest. If you shorted and got filled then obviously your broker located borrow for you. Legal? Ticked. You said you then went long an equal number shares. Legal? Ticked. You basically ended up with net zero exposure (not sure why you would do that in the first place as you had nothing to gain whatsoever). But legal? Ticked. You then sold the long position again (your broker says thanks for the double commission you paid in exchange for nothing) and ended up again with short exposure. If you did that with separate brokers (long with one broker and short with another) then there is nothing whatsoever illegal about that. So yes, I call you an idiot because you provided your broker (s) with several free lunches, lol. And your example has nothing WHATSOEVER to do with this thread. And short selling was totally legal and accepted business practice well before the financial crisis. Maybe you should refrain from participating in threads you seemingly have no idea of what the topic is actually about. Enough said.
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Tried to connect an indirect variable to the OP. What the hell...took a chance. You must be the idiot because your reading comprehension doesn't come close to your account balance. How the hell did you end up with any money? I gave all the info. and you couldn't understand it. Back then you couldn't always get shorts filled when market crashing in last 20 minutes and if you did it was at a bad price. Easy thousands of dollars in 20 min. or less. I'm still calling you a little man! We all see you hiding behind that screen...that's the only place you can talk shit to people. I consider myself having enough wealth, but I would never throw money figures around to appear like a big shot. I'm starting to doubt your monetary status...rich people don't show their hand! I use to be the guy that beat up the bullies in high school...you remind me of them for some reason. Something tells me I need keep an eye on you. Later little man.
 
How do you know the OP is not using something to hide his identity?
Also, in court his family/friends have to witness against him and it's for the brokers to PROVE he committed fraud. Then again, in American courts anything can happen.
 
no the bullshitter is you. So you are on one hand claiming your broker told you doing what you claim you did is illegal. On the other hand you tell us you held a long position so you could easily short (long sell) into another account later on? That would have only worked if the broker approved it. Makes zero sense buddy.

BONECRUSHER said:
Tried to connect an indirect variable to the OP. What the hell...took a chance. You must be the idiot because your reading comprehension doesn't come close to your account balance. How the hell did you end up with any money? I gave all the info. and you couldn't understand it. Back then you couldn't always get shorts filled when market crashing in last 20 minutes and if you did it was at a bad price. Easy thousands of dollars in 20 min. or less. I'm still calling you a little man! We all see you hiding behind that screen...that's the only place you can talk shit to people. I consider myself having enough wealth, but I would never throw money figures around to appear like a big shot. I'm starting to doubt your monetary status...rich people don't show their hand! I use to be the guy that beat up the bullies in high school...you remind me of them for some reason. Something tells me I need keep an eye on you. Later little man.
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