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Author Topic: Can you trade to yourself?
PCola77
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I have a bunch of shares of a thinly traded stock in one account. I want to close that acount, but instead of selling out, or transfering the shares, I put a sell in halfway betwen the bid and ask, and in another account, put a buy in for the same number of shares at the same price.

That leads me to two questions:

1) Am I allowed to do that?
2) It has been 45 minutes and the trade has not gone through, is that legal on their part? I mean I know we all have these conspiracy theories about the markets not being fair, but don't they HAVE TO put the trade through if there is a matching bid and offer?

Posts: 5508 | From: Southeastern PA | Registered: Jan 2006  |  IP: Logged | Report this post to a Moderator
BooDog
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Same price = no spread for the M&Ms so not very appetizing imo but if someone else shows up wanting some maybe your block will go through and they’ll take the spread from that sale. Then your buy may be treated the same way, a waiting game. Interesting P. I know these salty dogs round here with their multiple accounts prolly do it all day long. Maybe if you spread them out a little you could add a few shares by the time it's all said and done, make up for some of the commission. I may do the same thing when I'm ready to ditz scottie. Chances are your buy could go through without your sale even going through at all, then your stuck with the other shares until it goes through!

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All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?

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T e x
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what PC and I learned is that, yes, technically it's illegal...called a "wash sale" or "wash trade."

quote:
wash trade
A transaction designed to make it appear that a purchase and sale has occurred even though no change in ownership occurred. For example, an investor might simultaneously buy and sell shares in one company through two different brokerage firms in order to create the appearance of substantial trading activity that will draw in other investors. Wash trades are illegal.

and...if you do it with two accounts at the same broker? You're almost sure to get into hot water...

--------------------
Nashoba Holba Chepulechi
Adventures in microcapitalism...

Posts: 21062 | From: Fort Worth | Registered: Apr 2005  |  IP: Logged | Report this post to a Moderator
PCola77
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Yeah Tex, I also shot an e-mail to the SEC, if I hear back from them I will post that here as well.
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R1 Man
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quote:
Originally posted by T e x:
what PC and I learned is that, yes, technically it's illegal...called a "wash sale" or "wash trade."

quote:
wash trade
A transaction designed to make it appear that a purchase and sale has occurred even though no change in ownership occurred. For example, an investor might simultaneously buy and sell shares in one company through two different brokerage firms in order to create the appearance of substantial trading activity that will draw in other investors. Wash trades are illegal.

and...if you do it with two accounts at the same broker? You're almost sure to get into hot water...
I got nailed for that a few years ago. It was dumb....a stock I had was losing money so I sold it and let the stock drop and bought back in at a lower price avoiding an even bigger loss. I got caught. I think its dumb!!!

If I understand right....you can't sell a stock then buy back in the same day or with in 10 days or your subject to WASH RULES.

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T e x
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quote:
Originally posted by PCola77:
Yeah Tex, I also shot an e-mail to the SEC, if I hear back from them I will post that here as well.

way good.. please respond adult-ly to R1...

--------------------
Nashoba Holba Chepulechi
Adventures in microcapitalism...

Posts: 21062 | From: Fort Worth | Registered: Apr 2005  |  IP: Logged | Report this post to a Moderator
T e x
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quote:
Originally posted by T e x:
quote:
Originally posted by PCola77:
Yeah Tex, I also shot an e-mail to the SEC, if I hear back from them I will post that here as well.

way good.. please respond adult-ly to R1...
gawd, somebody hacked my account...lol, have no idea what that's supposed to mean [BadOne]

--------------------
Nashoba Holba Chepulechi
Adventures in microcapitalism...

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PCola77
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thanks for clarifying, because I read it 13 times and couldn't do the text-to-English translation

quote:
Originally posted by T e x:
quote:
Originally posted by T e x:
quote:
Originally posted by PCola77:
Yeah Tex, I also shot an e-mail to the SEC, if I hear back from them I will post that here as well.

way good.. please respond adult-ly to R1...
gawd, somebody hacked my account...lol, have no idea what that's supposed to mean [BadOne]

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BooDog
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quote:
Originally posted by PCola77:
thanks for clarifying, because I read it 13 times and couldn't do the text-to-English translation

quote:
Originally posted by T e x:
quote:
Originally posted by T e x:
quote:
Originally posted by PCola77:
Yeah Tex, I also shot an e-mail to the SEC, if I hear back from them I will post that here as well.

way good.. please respond adult-ly to R1...
gawd, somebody hacked my account...lol, have no idea what that's supposed to mean [BadOne]

LMAO like the "Tex" to English. wahahaha


- hey Friday's comin!

--------------------
All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?

Posts: 7754 | From: Virginia | Registered: May 2006  |  IP: Logged | Report this post to a Moderator
PCola77
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Yeah, I meant to type Tex-to-English, obviously [Smile]

quote:
Originally posted by BooDog:
quote:
Originally posted by PCola77:
thanks for clarifying, because I read it 13 times and couldn't do the text-to-English translation

quote:
Originally posted by T e x:
quote:
Originally posted by T e x:
quote:
Originally posted by PCola77:
Yeah Tex, I also shot an e-mail to the SEC, if I hear back from them I will post that here as well.

way good.. please respond adult-ly to R1...
gawd, somebody hacked my account...lol, have no idea what that's supposed to mean [BadOne]

LMAO like the "Tex" to English. wahahaha


- hey Friday's comin!


Posts: 5508 | From: Southeastern PA | Registered: Jan 2006  |  IP: Logged | Report this post to a Moderator
bilgert
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Somewhat off track here, but I have done the following a couple times to get losses on the books and in speaking to a tax attorney friend of mine, it's legal:

suppose you bought 1 million shares of a micro at .001 on January 1st (arbitrary date) and it tanked down to .0001/.0002 on the bid/ask a week later on January 8th. You could put in a GTC order to buy 1 million shares at .0001. Once that filled, you could then sell the lot you bought on January 1st and report it as a loss. The key is you MUST specify that the brokerage sells only the shares from the first lot. If you forget and don't declare which lot you're selling OR if you even sell 1,000,001 shares, it's considered a wash sale.

The only gotcha is if you get trapped and you can't sell your initial position. Then you end up with 2 million shares of garbage and no declarable loss.

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T e x
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quote:
Originally posted by bilgert:
Somewhat off track here, but I have done the following a couple times to get losses on the books and in speaking to a tax attorney friend of mine, it's legal:

suppose you bought 1 million shares of a micro at .001 on January 1st (arbitrary date) and it tanked down to .0001/.0002 on the bid/ask a week later on January 8th. You could put in a GTC order to buy 1 million shares at .0001. Once that filled, you could then sell the lot you bought on January 1st and report it as a loss. The key is you MUST specify that the brokerage sells only the shares from the first lot. If you forget and don't declare which lot you're selling OR if you even sell 1,000,001 shares, it's considered a wash sale.

The only gotcha is if you get trapped and you can't sell your initial position. Then you end up with 2 million shares of garbage and no declarable loss.

good post, bilgert

--------------------
Nashoba Holba Chepulechi
Adventures in microcapitalism...

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BooDog
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Scottie (at least with the branch I am dealing with) requires me to call prior to setting the sale to specify shares that i wish to sell as in Bilgerts example. They would enter the order for me as an online commission order with a special code identifying which lot I am selling that was purchased at whatever price so I can claim my loss, my lower cost shares are still available to soak up those capital gains.... some day. A follow up e-mail always helps.

--------------------
All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?

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metal1
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quote:
Originally posted by R1 Man:
quote:
Originally posted by T e x:
what PC and I learned is that, yes, technically it's illegal...called a "wash sale" or "wash trade."

quote:
wash trade
A transaction designed to make it appear that a purchase and sale has occurred even though no change in ownership occurred. For example, an investor might simultaneously buy and sell shares in one company through two different brokerage firms in order to create the appearance of substantial trading activity that will draw in other investors. Wash trades are illegal.

and...if you do it with two accounts at the same broker? You're almost sure to get into hot water...
I got nailed for that a few years ago. It was dumb....a stock I had was losing money so I sold it and let the stock drop and bought back in at a lower price avoiding an even bigger loss. I got caught. I think its dumb!!!

If I understand right....you can't sell a stock then buy back in the same day or with in 10 days or your subject to WASH RULES.

FYI, ITS 30 DAYS (NOT 10) BEFORE OR AFTER, BUT WHO'S COUNTING
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beechwood
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I wouldn't count on the SEC taking action on
the above mentioned issues.
Naked short selling, wash trades, etc. are
all highly illegal activities.
Much more illegal than anything Martha Stewart
ever did.
Yet the SEC turns a blind eye while this sort
of thing runs rampant on Wall St.
They will bust the little guy for same but hardly ever go after the big fish.
Makes you wonder who the true insiders really
are doesn't it.....

Posts: 669 | From: Gouldsboro, Pa. | Registered: May 2006  |  IP: Logged | Report this post to a Moderator
   

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