You are right, it will, in any event, never be the investors problem. The brokerage has full responsibility. Loaned shares are given to the short seller to satisfy settlement of their short sale, so the shares transfer out of street name to the new owner. If the short fails to repay the loan of the shares to the brokerage, then the brokerage has to take the loss and replace the shares. So it is basically like a bank that takes depositors funds and then lends them to someone else. If that loan fails, then the bank has to make up the loss. There is some more to read about it in http://en.wikipedia.org/wiki/Short_(finance) that gives some good examples.
Thanks for the clarification. I own long term shares, presently under water, as well. Collecting the dividend on these shares, helps ease the pain and allows us to get paid something, while we wait.
I will listen to the investor conference tonight, as well, and I will report back on this message board, if I think there is anything of importance. However, I doubt there will be anything new under the sun. I have listened to all the investor conferences and conference calls and the mantra is that the banks will lose very little money in their niche lending; they will have some losses on their non-niche lending but certainly less than their peers; they have had tremendous growth in share price from the initial IPO of 1993 to the present; and that they pay an awesome dividend.
All of the above is true, but the stock price appreciation/growth from late 2004 until the present has been atrocious, and I wish CEO Ficalora would be more ingenuous and state how the stock price appreciation, or lack thereof, SUCKS, since the latter part of 2004. That is the only issue that irks me is that Ficalora does not address how bad the stock has languished for the last five years, in his investor conferences and instead touts the impressive stock price appreciation since the IPO. That is all well and good if you are an original IPO investor in this company, but if not, you are stuck. How many people are original IPO investors in NYB stock?
I agree about buying long. Owning stock is still an investment making you a company owner, and I like that part of business. But I will make one point. Owning the shares does not mean those shares are not used to loan to shorts unless you specifically take delivery of the certificates. If shares are held in street name, as in virtually every brokerage account, then that account agreement says is virtually every case that those shares may be loaned or used by the brokerage. That is where the legitimate shorts get their loaned shares. You probably know this but I thought to make the point anyway. I don't like having my long shares loaned but can't deal with the complications of taking delivery of certificates. So it kind of goes with the turf.
Of course it is prudent to sell. How do you think that you could ever have bought your NYB stock if another person (investor) did not sell you his/her shares? Buying and selling are part of the stock market and part of the nature of the business.
I am a long term investor holder of NYB shares but I am looking to make money, like anyone else. Besides dividends, if a person does not sell his anticipated appreciated shares, he/she could never actually realize any profit.
So, with all due respect, what are you talking about?
Remember, I had sold the September $12.00 strike price calls, and received .25 per share. My trading shares were at $11.35/share and $11.65/share. So, if I wanted to buy the calls back, and close my position, it was going to cost me $.05/share, and that is what I did, this afternoon.
I now own the shares again, outright, without any calls attached to them, and lowered my cost basis from $11.35 and $11.65, to $11.05 and $11.45, respectively.
You, my friend, made some nice trading profits, selling on scale, and if my memory serves me well, your total average selling price must have been around $11.25/share from an original purchase price in the low 10's.
Congratulations to you.
Today's price action has brought me back to even on one half of my trading shares. Those shares being priced at $11.35/share. I have not sold them, but I can't believe that NYB has come up this high, in such a short period of time.
If and when you sell, at these prices or higher, you will have made a good trade, having scaled out, at higher and higher prices.
Only 1/3 more to go, and you are completely out of your trading shares. My trading shares are at 11.47/share, so I have a ways to go. However, as I had alluded to in a previous post, I sold September $12 strike price calls on them, so I made money trading the options, as it appears that NYB will not reach a $12/share price by Friday.
I was looking to rollover my calls into the October month, but the options do not have a $12 strike price and instead have a $12.50 strike price which is paying practically nil.
I am seriously considering keeping my trading shares as long term holding shares and writing option premium, when the opportunity arises. Time and circumstances will tell, but congratulations on making money with the second 1/3 batch of your shares.
That was a really good trade. Great buy point and good selling price. I think the price may go up a little more, from here, but I would have certainly done the same thing, if I had bought shares in the low 10's.
How did you know that I was a chiropractor.