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From: ekwok@cadsys.UUCP (Kwok Ed)
Newsgroups: net.invest
Subject: Re: Re: M-L CMA info request
Message-ID: <178@cadsys.UUCP>
Date: Tue, 22-Oct-85 20:28:10 EDT
Article-I.D.: cadsys.178
Posted: Tue Oct 22 20:28:10 1985
Date-Received: Sat, 26-Oct-85 05:27:49 EDT
References: <1723@akgua.UUCP> <109000007@ima.UUCP>
Reply-To: ekwok@cadsys.UUCP (Kwok Ed)
Organization: Intel, Santa Clara, Ca.
Lines: 41
Summary: 

In article <109000007@ima.UUCP> johnl@ima.UUCP writes:
>
>It's true, safekeeping of stock certificates is a standard service provided 
>by every broker for free, including discount brokers who charge half of 
>what M-L does for each purchase or sale.  Ditto a free checking account 
>from any bank around, if you have substantial assets in that or other 
>accounts.  I gather that M-L charges something like $2.00 apiece if you 
>actually want your checks back.  Is that true?  
>
>John Levine, ima!johnl

I will hesitate to call it a service. They don't "safekeep" your stock
certificates; intead, the stocks are registered in "street name" or in
other words, their name. They get to lend it out to people who short the
stock, charging a "rent" for such use. Also, brokerage houses also
"makes market" and keeps an "inventory". Sort of create stocks by a
stroke of the pen; they will sell you stock from their inventory, if
their trading desk think the stock will go down - when they maintain a
"negative inventory" position - in other words, you may get to buy 
what they short. You may find yourself at the disadvantaged end of 
the "bigger sucker" theory.

Brokerage house don't provide the service out of the kindness of their
hearts, that poor souls may lose their certificates if they are not
careful.






-- 
So there ...

Disclaimer : Why do a need a disclaimer? All opinions above are mine and
nobody else's. So if you would please step outside ...

Edward C. Kwok
Intel Corp.,
Santa Clara, CA 95051.
(408)-987-8080