Steel/Gagger...I'm not an expert but see highlight below. I believe short data for securities trading under 1$ are bogus.
SHORT SELLING
Description
Selling a security you do not own. Short selling is a speculative trading strategy normally done in anticipation of falling prices. When selling the security at a certain price and then buying it back (Buy to Cover) the profit or loss would be the difference between the initial selling price and the subsequent purchase price. It is illegal for a seller not to declare a short sale at the time an order is placed.
Special Cautions
No interest is credited on cash balances in short ( G & H ) accounts.
Short positions are "marked to market" daily by transfers of cash between your margin and short accounts.
Short sellers should be aware of the specialized risk of a buy-in of their position at any time.
Short sellers are responsible for dividend charge-backs and any other distributions while they are short.
Restrictions
Restrictions such as "All or None" are not allowed on short sell orders.
Market orders placed on the Toronto Stock Exchange/TSX Venture Exchange before the market opens are prohibited.
Canadian orders must be in even board lots.
U.S. orders allow odd board lots and mixed board lots.
A security cannot be shorted in the short account if the margin account is long the same security.
U.S. securities - If TD Waterhouse cannot borrow the security for you to sell at the time the order is placed, the order will be rejected.
The following securities cannot be shorted:
Securities trading under $ 1.00
NASDAQ Bulletin Board and Pink sheet Securities.
Any Canadian over-the-counter securities.
Securities which have had their margin eligibility removed by TD Waterhouse.
Trading 'Tick' Rules
The tick is the direction in which the price of a stock moved on its last sale. An up-tick means the last trade was at a higher price than the one before it, and a down-tick means the last trade was lower than the one before it. A zero-tick, or even tick, means the transaction was at the same price as the one before it.
Exchanges impose restrictions when a stock can be sold short. Known as the tick rule, the tick rule for the exchanges are:
|
Toronto Stock Exchange
|
even or uptick
|
|
TSX Venture Exchange
|
even or uptick
|
|
NYSE
|
uptick
|
|
AMEX
|
uptick
|
|
NASDAQ
|
uptick
|
Buy-In of the Short Position
You can be forced to buy the shares you are short (a Buy-In) on two occasions:
When TD Waterhouse is recalled on the equity they borrowed to protect your position.
When TD Waterhouse is unable to borrow shares to protect the position.
A Buy-In can happen without prior notice to you. Also, even if you repurchase the short position, you are still liable to a Buy-In until the settlement date.
Mark-to-Market
When a short position is first created (i.e. security sold short), the short account will have a cash balance from the proceeds of the sale and the market value of the short position will appear as a negative. The cash balance equals the negative market value of the short position.
When the price falls or rises, the market value changes accordingly, but the cash balance still reflects the original proceeds. Therefore, on a daily basis, a "mark-to-market" is calculated to balance out these gains or losses and equalize the cash balance with the market value of the position. TD Waterhouse automatically moves funds between the margin account and the short account as required. There is always a one-day delay between the calculation and the moving of funds.
Margin Requirements and Concentration Guidelines
For more information, please review the Margin Disclosure Statement.
Please also review a few examples of Margin Calculations.
| Margin Requirement |
Concentration Guidelines |
| 30% |
$1,000,000 Loan Value |
| 50% |
$500,000 Loan Value |
| 75% |
$25,000 Loan Value |
| 100% |
Not Applicable |
|
Please be advised that TD Waterhouse has reduced and/or limited the loan value and concentration guidelines on certain securities, due to their price volatility or liquidity.
Review the list.
|
Category of
Security |
Margin
Requirement |
Concentration Guidelines |
| Paris, London & Tokyo Stock Exchanges |
50% |
$500,000
Loan Value |
| Other Stock Exchanges |
100% |
Not Applicable |
Category of
Security |
Margin
Requirement |
Concentration Guidelines |
| Mutual Funds priced over $3.00 per unit (excluding money market mutual funds) |
50% |
$500,000
Loan Value |
| Mutual Funds priced under $3.00 per unit |
100% |
Not Applicable |
| Money Market Mutual Funds priced over $3.00 per unit |
5% |
$1,000,000
Loan Value |
Category of
Security |
Margin
Requirement |
Concentration Guidelines |
| Government of Canada |
4% |
$1,000,000
Loan Value |
| Provincial Bonds |
5% |
$1,000,000
Loan Value |
| Municipal Bonds |
10% |
$1,000,000
Loan Value |
| U.S. Treasury Bonds |
4% |
$1,000,000
Loan Value |
| Corporate Bonds |
15% |
$750,000
Loan Value |
Investment Grade
Convertible Bonds |
15% plus
(100% of excess
Market Value over par with a minimum of
10% of par)
|
$500,000
Loan Value |
| All other Convertible Bonds |
100% of excess Bond Market Value over the Underlying Conversion Value plus (Underlying Conversion Value x Underlying Common Stock Margin Requirement (%))) |
$500,000
Loan Value |
| Foreign issued bonds |
100% |
Not applicable |
| Eurobonds |
25% |
$750,000
Loan Value |
| Mortgage-backed securities |
10% |
$750,000
Loan Value |
| Strips - Maturity less than 20 years |
1.5 times applicable rate |
$750,000
Loan Value |
| Strips - Maturity of 20 years and greater |
3 times applicable rate |
$250,000
Loan Value |
Category of
Security |
Margin
Requirement |
Concentration Guidelines |
| Canada Savings Bonds |
100% |
Not Applicable |
| Provincial Savings Bonds |
1% |
$1,000,000
Loan Value |
| T-Bills |
1% |
$1,000,000
Loan Value |
| GICs |
15% |
$1,000,000
Loan Value |
| Term Deposits |
4% |
$1,000,000
Loan Value |
| Banker's Acceptance |
4% |
$750,000
Loan Value |
| Commercial Paper |
15% |
$750,000
Loan Value |
Category of
Security |
Margin
Requirement |
Concentration Guidelines |
| Gold/Silver/Platinum* |
30% |
$250,000
Loan Value |
Category of
Security |
Margin
Requirement |
Concentration Guidelines |
| Listed Warrants ($3.00+) |
50% |
$250,000
Loan Value |
| Short Selling Canadian/U.S Listed Equity and ETF Securities $3.00+ |
| Margin Requirement |
Concentration Guidelines |
| 130% |
$250,000
Market Value |
| 150% |
$250,000
Market Value |
| 175% |
$25,000
Market Value |
|