Where did $2,000 go?
June 14th, 2006 by KenricI haven’t talked about stocks in a while, mainly because the market has been doing so bad. I got out of Google about a month ago and have half my dollars sitting in money market right now. Last night I was logged into my brokerage account when I noticed a $2,000 transfer from my account to a Bank of America bank account from last week.
This was disturbing because I only had $3 in my account at the time and I do not have a Bank of America account. I called my brokerage right away and they are investigating it now. The brokerage account allows you to link up checking accounts with your accounts so you can transfer money easier. They think that someone mistyped the account number and linked someone else’s checking account to my brokerage account. I really hope that this is the case, I can’t figure out how this could happen and how the other person who withdrew $2,000 would not notice that they are linked to the wrong account. They are suppose to call me back later today.
What I find interesting is the fact that I had only $3 in my account at the time. I do have a margin account so I can borrow money to buy stocks. However, the fact that they withdrew $2,000 and my balance is now -$1,997 to me is saying “Hey, I can use my margin account to take cash loans!” If my margin limit is $20,000 I can borrow $20,000 and use it outside of my brokerage account. The current margin rate is 10.5% so it’s not a great loan but it’s nice to have!
Posted in Finances | 3 Comments »
Stumble it!
That’s actually a slick idea. I never thought about using my margins as a “quick, dirty” loan.
By Clifford on Jun 15, 2006
Yes sure – the borrowing limit is lower if you withdraw the money versus buying marginable stock with it. It’s the same as a home equity loan – you can go spend it or use it to buy another house (or stocks or whatever).
By mOOm on Jun 17, 2006