Forum Archive Index - April 2000

[Sarah Corkill <Sarah.Corkill@directbroking.co.nz>]

Hi Robert,

When the Exchange suspends a company from trading all trades up to when the
company became suspended still have to be settled.  So the broker you
purchased the shares through still has to pay the broker you purchased the
shares from and they have to deliver the shares.  You still have to pay your
broker for these shares whether or not you are able to sell them.

You were very lucky this time around and your gamble should pay off when the
company starts trading again and investors attempt to ride Mr Watson's wave.
I'm not trying to discourage you from trading but I have seen alot of people
fail miserably when trading T+3 on credit with no ready cash-at-hand if
their foray doesn't pan out.  Often all that is needed is an extra couple of
days for the shares to rebound as you'd originally thought they would.  Had
you been caught say last Monday when  our market lost more than 90 points
you would be sitting on rather a large loss right now which you may or may
not be able to cover either?

I believe that traders are a necessary part of the market to provide depth
and liquidity.  Trading involves good information, cast iron faith in your
selection ability AND CASH! (and of course a great broker)

Robert, use the cash you make on this win to help finance the next so you
(hopefully) won't be caaught in this situation again.

Kind regards,

Sarah Corkill
Direct Broking


-----Original Message-----
From: Robert Nottage [mailto:robnottage@yahoo.com]
Sent: Thursday, 27 April 2000 21:56
To: sharechat@sharechat.co.nz
Subject: [sharechat] Advice on credit+3T-days required


I bought some FRO shares on Wednesday on the usual
credit+3 trading days and had intended to sell within
3 days.
Hypothethically, what would happen if trading on FRO
was suspended for more than 3 trading days (which
would of course prevent me from selling up because
there would be no trading on that stock) and I didn't
have the cash to pay for the shares until I had traded
those shares in. Does the 3T-days still apply when
trading on a stock is stopped by the stock exchange?
Would be interested in the views of readers.

Robert

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