Tradezero naked shorts ?? please help...

H

hbisbis

On March 24th , I was forced out my short position with TKAT based on SEC SHO rule 204 according to their email. From what I gather , SHO rule 204 set guidelines and rules pertaining to naked shorting which I don’t believe I was subject to because I used TRADEZERO locate service and agreed to the locate fees. So WTF ??? Was I mislead into unknowingly taking a naked short position and thus exposing myself to be closed out in 4 days automatically per the 204 rule ?
Further more , I did send more funds to my account on the prior day to make sure to maintain it in good standing.

Can someone with experience please help me understand ?

Many thanks for your time.
 
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This was not a liquidation as my account was fully funded at the time. The reason stated was not a margin or fund issue but the SEC SHO rule 204 which is a anti naked shorting measure. I just feel I should not have been subject to it unless If I was unknowingly...
 
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Sometimes, when a short is held overnight, we are unable to source shares for delivery. When that happens, like at all other firms, the shares need to be bought in on settlement. This is a standard practice and one that we do our best to avoid, as we are generally great at sourcing those borrows.
 
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hbisbis said:
On March 24th , I was forced out my short position with TKAT based on SEC SHO rule 204 according to their email. From what I gather , SHO rule 204 set guidelines and rules pertaining to naked shorting which I don’t believe I was subject to because I used TRADEZERO locate service and agreed to the locate fees. So WTF ??? Was I mislead into unknowingly taking a naked short position and thus exposing myself to be closed out in 4 days automatically per the 204 rule ?
Further more , I did send more funds to my account on the prior day to make sure to maintain it in good standing.

Can someone with experience please help me understand ?

Many thanks for your time.
More...

Locate is a reasonable expectation of obtaining the shares. Their inventory will change and issue buy-ins for shorts based on the inventory or rather lack of shortable inventory.
 
hbisbis said:
This was not a liquidation as my account was fully funded at the time. The reason stated was not a margin or fund issue but the SEC SHO rule 204 which is a anti naked shorting measure. I just feel I should not have been subject to it unless If I was unknowingly...
More...

Looks like you triggered the "fail to deliver" requirement in that rule. According to the rule 204, you have now T+4 to deliver your shares for short sale and T+6 for long sale. https://www.sec.gov/investor/pubs/regsho.htm
 
Tradezero will charge a boatload out of you as longest they know they can get away with it. Trust me, I've used them for 6 years. I was charged $500 once for holding shorts overnight.
 
YOU WERE NAKED BORROWING!! YOU WERE NAKED BORROWING!! Rinse and repeat...What part of that option do you not understand?? When you signed the disclosure with Tradezero, you stated your knowledge of trading options was vast and lengthy!! Were you telling the truth?? I assume you read the disclosure fully??

If you went to arbitration, the first thing Tradezero would present is your signature, stating you said you knew what you were doing.
 
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