Effective on May 4, 2017
This privacy statement describes how Stock USA Execution Services, Inc. collects and uses the personal information you provide on our Web site: www.speedtrader.com. It also describes the choices available to you regarding our use of your personal information and how you can access and update this information.
We collect the following personal information from you:
Contact Information such as name, email address, mailing address, phone number
Financial Information such as bank or brokerage account numbers, types of investments
Social Security Number
Driver’s License Number
Unique Identifiers such as user name, account number, password
Demographic information such as age, education, gender, interests and zip code
As is true of most Web sites, we automatically gather information about your computer such as your IP address, browser type, referring/exit pages, and operating system. We use this information to:
Respond to customer service requests
Administer your account
Respond to your questions and concerns
We will share your personal information with third parties only in the ways that are described in this privacy statement. We do not sell your personal information to third parties.
We may provide your personal information to companies that provide services to help us with our business activities such as shipping your order or offering customer service. These companies are authorized to use your personal information only as necessary to provide these services to us.
We may also disclose your personal information:
As required by law such as to comply with a subpoena, or similar legal process
When we believe in good faith that disclosure is necessary to protect our rights, protect your safety or the safety of others, investigate fraud, or respond to a government request
If Stock USA Execution Services, Inc. is involved in a merger, acquisition, or sale of all or a portion of its assets, you will be notified via email and/or a prominent notice on our Web site of any change in ownership or uses of your personal information, as well as any choices you may have regarding your personal information
To any other third party with your prior consent to do so
Cookies and Other Tracking Technologies
We use another company to place cookies on your computer to collect non-personally identifiable information to compile aggregated statistics for us about visitors to our site.
Our Web pages may also contain electronic images known as Web beacons (sometimes called single-pixel gifs) that are set by our third party partners. Web beacons are used along with cookies enabling our partners to compile aggregated statistics to analyze how our site is used.
We use a third party to gather information about how you and others use our Web site. For example, we will know how many users access a specific page and which links they clicked on. We use this aggregated information to understand and optimize how our site is used.
Links to Other Web Sites
Our Site includes links to other Web sites whose privacy practices may differ from those of Stock USA Execution Services, Inc. If you submit personal information to any of those sites, your information is governed by their privacy statements. We encourage you to carefully read the privacy statement of any Web site you visit.
The security of your personal information is important to us. When you enter sensitive information (such as credit card number) on our order forms, we encrypt the transmission of that information using secure socket layer technology (SSL).
We follow generally accepted industry standards to protect the personal information submitted to us, both during transmission and once we receive it. No method of transmission over the Internet, or method of electronic storage, is 100% secure, however. Therefore, we cannot guarantee its absolute security.
Additional Policy Information
Our Web site offers publicly accessible blogs or community forums. You should be aware that any information you provide in these areas may be read, collected, and used by others who access them.
Correcting and Updating Your Personal Information
Notification of Privacy Statement Changes
We may update this privacy statement to reflect changes to our information practices. If we make any material changes we will notify you by email (sent to the e-mail address specified in your account) or by means of a notice on this Site prior to the change becoming effective. We encourage you to periodically review this page for the latest information on our privacy practices.
Our employees or representatives may collect nonpublic personal information about you from various sources including:
Your account application or other supplemental account forms.
Your transactional history with Stock USA Execution Services, Inc.
Your account records including transactional history with nonaffiliated COR Clearing, LLC, where it is appropriate.
Information from credit reporting agencies (e.g… Experian, Equifax, and Trans Union).
Current and prior employers, federal and state agencies.
Consumer reporting agencies such as McDonald Information Service, Inc.
YOUR NONPUBLIC PERSONAL INFORMATION
The type of nonpublic personal information collected varies according to the products or services provided and may include, the following categories: (1) name, (2) current and prior resident addresses, (3) phone number, (4) e-mail address, (5) social security number, (6) securities or futures trading history, (7) date of birth, (8) banking relationships, (9) interest in opening an account, (10) investment experience, (11) total assets, (12) cash balances, (13) margin information, (14) trading positions, (15) account balances, (16) income, (17) excess margin, (18) margin loan records, and (19) deposit and withdrawal history.
Information collected is used to process your transactions, update your account records, to inform you of other services that may be of interest, and to ensure compliance with appropriate regulations.
OPT OUT OF DISCLOSURE
The law allows you to “opt out” of our sharing nonpublic personal information about you in certain circumstances with affiliated and nonaffiliated companies; that is, you may direct us to not make such disclosures. We do not currently share information about you with any affiliate or third party that triggers this opt-out right. Therefore, there is no need for you to opt out. If in the future we desire to disclose your information in a way that is inconsistent with this policy, we will notify you in advance and provide you with the opportunity to opt out of such disclosure.
THIS PRIVACY NOTICE IS PROVIDED TO YOU FOR INFORMATIONAL PURPOSES ONLY. YOU DO NOT NEED TO CALL OR TAKE ANY ACTION IN RESPONSE TO THIS NOTICE. WE RECOMMEND THAT YOU READ AND RETAIN THIS NOTICE FOR YOUR PERSONAL RECORDS.
You can contact us about this privacy statement by writing or email us at the address below:
Stock USA Execution Services, Inc.
1717 Route 6, Suite 102
Carmel, NY 10512
(800) 874-3039 from 8:00 a.m. to 5:00 p.m. EST or fax (845) 622-4878
The Risks Associated With Penny Stocks
IMPORTANT INFORMATION REGARDING THE RISKS ASSOCIATED WITH PENNY STOCKS:
You should know that Penny Stocks can be very, very risky. Penny Stocks are low-priced shares of small companies not traded on an exchange or quoted on NASDAQ. Investors beware when trading in Penny Stocks. Do not make a hurried investment decision in Penny Stocks:
- Be cautious of newly issued Penny Stocks
- Study the company issuing Penny Stocks
- Understand the risky nature of Penny Stocks
- Penny Stock prices are often unavailable
- You may not be able to sell your shares in Penny Stocks
- You may lose your investment in Penny Stocks
Customer’s rights and remedies
If you are a victim of fraud, you may have rights and remedies under the state and federal law. For additional information contact your state securities official, at the North American Securities Administrators Association’s central number (202) 737-0900. You may also contact the SEC with complaints at (202) 272-7440.
Penny Stock Risk Disclosure
You are advised to read this before buying or selling any penny stocks online. Trading penny stocks online has some built-in risks for traders. Below is some vital information about trading penny stocks online.
Important Information Concerning Penny Stocks
This statement is required by the U.S. Securities and Exchange Commission (SEC) and contains important information on penny stocks. Your broker- dealer is required to obtain your signature to show that you have received this statement before your first trade in a penny stock. You are urged to read this statement before signing and before making a purchase or sale of a penny stock.
Penny stocks can be very risky
Penny stocks are low-priced shares of small companies not traded on an exchange or quoted on NASDAQ. Prices often are not available. Investors in penny stocks often are unable to sell stock back to the dealer that sold them the stock. Thus, you may lose your investment. Be cautious of newly issued penny stock. Do not rely on any salesperson, but seek outside advice before you buy any stock. If you have problems with any salesperson, contact the firm’s compliance officer or the regulators listed below.
Information you should get
Before you buy penny stock, federal law requires that you must know the “offer” and the “bid” on the stock, and the “compensation” the firm will receive for the trade. The firm also must mail a confirmation of these prices to you after the trade. You will need this price information to determine what profit, if any, you will have when you sell your stock. The offer price is the wholesale price at which the dealer is willing to sell stock to other dealers. The bid price is the wholesale price at which the dealer is willing to buy the stock from other dealers. In its trade with you, the dealer may add a retail charge to these wholesale prices as compensation (called a “markup” or “markdown”). The difference between the bid and the offer price is the dealer’s “spread.” A spread that is large compared with the purchase price can make a resale of a stock very costly. To be profitable when you sell, the bid price of your stock must rise above the amount of this spread and the compensation charged by both your selling and purchasing dealers. If the dealer has no bid price, you may not be able to sell the stock after you buy it, and may lose your whole investment.
Brokers’ duties and customer’s rights and remedies
If you are a victim of fraud, you may have rights and remedies under state and federal law. You can get the disciplinary history of a firm from the FINRA at 1-800-289-9999, and additional information from your state securities official, at the North American Securities Administrators Association’s central number: (202) 737-0900. You also may contact the SEC with complaints at (202) 272-7440.
The securities being sold to you have not been approved or disapproved by the Securities and Exchange Commission. Moreover, the Securities and Exchange Commission has not passed upon the fairness or the merits of this transaction nor upon the accuracy or adequacy of the information contained in any prospectus or any other information provided by an issuer or a broker or dealer.
Generally, penny stock is a security that:
Is priced under five dollars
Is not traded on a national stock exchange or on NASDAQ (the automated quotation system for actively traded stocks)
May be listed in the “pink sheets” or the FINRA OTC Bulletin Board
Is issued by a company that has less than $5 million in net tangible assets and has been in business less than three years, by a company that has under $2 million in net tangible assets and has been in business for at least three years, or by a company that has revenues of $6 million for 3 years.
Use Caution When Investing in Penny Stocks
- Do not make a hurried investment decision. Stock USA/SpeedTrader does not offer investment advice or employee salespersons. All orders received are unsolicited. However, you should know that high- pressure sales techniques can be a warning sign of fraud. Remember if any salesperson is involved that salesperson is not an impartial advisor, but is paid for selling stock to you. A salesperson also does not have to watch your investment for you. Thus, you should think over the offer and seek outside advice. Check to see if the information given by any salesperson differs from other information you may have. Also, it is illegal for salespersons to promise that a stock will increase in value or is risk-free, or to guarantee against loss. If you think there is a problem, ask to speak with a compliance official at the firm, and, if necessary, any of the regulators referred to in this statement.
- Study the company issuing the stock. Be wary of companies that have no operating history, few assets, or no defined business purpose. These may be sham or “shell” corporations. Read the prospectus for the company carefully before you invest. Some dealers fraudulently solicit investors’ money to buy stock in sham companies, artificially inflate the stock prices, then cash in their profits before public investors can sell their stock.
- Understand the risky nature of these stocks. You should be aware that you may lose part or all of your investment. Because of large dealer spreads, you will not be able to sell the stock immediately back to the dealer at the same price it sold the stock to you. In some cases, the stock may fall quickly in value. New companies, whose stock is sold in an “initial public offering,” often are riskier investments. Try to find out if the shares the salesperson wants to sell you are part of such an offering. The firm or if a salesperson is involved must give you a “prospectus” in an initial public offering, but the financial condition shown in the prospectus of new companies can change very quickly.
- Know the brokerage firm and the salespeople, if any, with whom you are dealing. Because of the nature of the market for penny stock, you may have to rely solely on the original brokerage firm that sold you the stock for prices and to buy the stock back from you. Ask the Financial Industry Regulatory Authority (FINRA) or your state securities regulator, which is a member of the North American Securities Administrators Association, Inc. (NASAA), about the licensing and disciplinary record of the brokerage firm and the salesperson contacting you. The telephone numbers of the FINRA and NASAA are listed on the first page of this document.
- Be cautious if your salesperson leaves the firm. If the salesperson who sold you the stock leaves his or her firm, the firm may reassign your account to a new salesperson. If you have problems, ask to speak to the firm’s branch office manager or a compliance officer. Although the departing salesperson may ask you to transfer your stock to his or her new firm, you do not have to do so. Get information on the new firm. Be wary of requests to sell your securities when the salesperson transfers to a new firm. Also, you have the right to get your stock certificate from your selling firm. You do not have to leave the certificate with that firm or any other firm.
Disclosures to you. Under penalty of federal law, your brokerage firm must tell you the following information at two different times-before you agree to buy or sell a penny stock, and after the trade, by written confirmation:
The bid and offer price quotes for penny stock, and the number of shares to which the quoted prices apply. The bid and offer quotes are the wholesale prices at which dealers trade among themselves. These prices give you an idea of the market value of the stock. The dealer must tell you these price quotes if they appear on an automated quotation system approved by the SEC. If not, the dealer must use its own quotes or trade prices. You should calculate the spread, the difference between the bid and offer quotes, to help decide if buying the stock is a good investment.
A lack of quotes may mean that the market among dealers is not active. It thus may be difficult to resell the stock. You also should be aware that the actual price charged to you for the stock may differ from the price quoted to you for 100 shares. You should therefore determine, before you agree to a purchase, what the actual sales price (before the markup) will be for the exact number of shares you want to buy.
The brokerage firm’s compensation for the trade. A markup is the amount a dealer adds to the wholesale offer price of the stock and a markdown is the amount it subtracts from the wholesale bid price of the stock as compensation. A markup/markdown usually serves the same role as a broker’s commission on a trade. Most of the firms in the penny stock market will be dealers, not brokers.
The compensation received by the brokerage firm’s salesperson for the trade. The brokerage firm must disclose to you, as a total sum, the cash compensation of your salesperson (if any) for the trade that is known at the time of the trade. The firm must describe in the written confirmation the nature of any other compensation of your salesperson (if any) that is unknown at the time of the trade.
In addition to the items listed above, your online brokerage firm must send to you:
Monthly account statements. In general, your brokerage firm must send you a monthly statement that gives an estimate of the value of each penny stock in your account, if there is enough information to make an estimate. If the firm has not bought or sold any penny stocks for your account for six months, it can provide these statements every three months.
A Written Statement of Your Financial Situation and Investment Goals. In general, unless you have had an account with your brokerage firm for more than one year, or you have previously bought three different penny stocks from that firm, your brokerage firm must send you a written statement for you to sign that accurately describes your financial situation, your investment experience, and your investment goals, and that contains a statement of why your firm decided that penny stocks are a suitable investment for you. The firm also must get your written consent to buy the penny stock.
Legal remedies. If penny stocks are sold to you in violation of your rights listed above, or other federal or state securities laws, you may be able to cancel your purchase and get your money back. If the stocks are sold in a fraudulent manner, you may be able to sue the persons and firms that caused the fraud for damages. If you have signed an arbitration agreement, however, you may have to pursue your claim through arbitration. You may wish to contact an attorney. The SEC is not authorized to represent individuals in private litigation.
However, to protect yourself and other investors, you should report any violations of your brokerage firm’s duties listed above and other securities laws to the SEC, the FINRA or your state securities administrator at the telephone numbers on the first page of this document. These bodies have the power to stop fraudulent and abusive activity of salespersons and firms engaged in the securities business. Or you can write to the SEC at 450 Fifth St., NW., Washington, DC 20549; the FINRA at 1735 K Street, NW., Washington, DC 20006; or NASAA at 555 New Jersey Avenue, NW., Suite 750, Washington, DC 20001. NASAA will give you the telephone number of your state’s securities agency. If there is any disciplinary record of a person or a firm, the FINRA NASAA, or your state securities regulator will send you this information if you ask for it.
The market for penny stocks
Penny stocks usually are not listed on an exchange or quoted on the NASDAQ system. Instead, they are traded between dealers on the telephone in the “over-the-counter” market. The OTC Bulletin Board also will contain information on some penny stocks. At times, however, price information for these stocks is not publicly available.
In some cases, only one or two dealers, acting as “market makers,” may be buying and selling a given stock. You should first ask if a firm is acting as a broker (your agent) or as a dealer. A dealer buys stock itself to fill your order or already owns the stock. A market maker is a dealer who holds itself out as ready to buy and sell stock on a regular basis. If the firm is a market maker, ask how many other market makers are dealing in the stock to see if the firm (or group of firms) dominates the market. When there are only one or two market makers, there is a risk that the dealer or group of dealers may control the market in that stock and set prices that are not based on competitive forces. In recent years, some market makers have created fraudulent markets in certain penny stocks, so that stock prices rose suddenly, but collapsed just as quickly, at a loss to investors.
Mark-ups and mark-downs
The actual price that the customer pays usually includes the mark-up or mark-down. Markups and markdowns are direct profits for the firm and its salespeople, so you should be aware of such amounts to assess the overall value of the trade.
The difference between the bid and offer price is the spread. Like a mark-up or mark-down, the spread is another source of profit for the brokerage firm and compensates the firm for the risk of owning the stock. A large spread can make a trade very expensive to an investor. For some penny stocks, the spread between the bid and offer may be a large part of the purchase price of the stock. Where the bid price is much lower than the offer price, the market value of the stock must rise substantially before the stock can be sold at a profit. Moreover, an investor may experience substantial losses if the stock must be sold immediately.
Example: If the bid is $0.04 per share and the offer is $0.10 per share, the spread (difference) is $0.06, which appears to be a small amount. But you would lose $0.06 on every share that you bought for $0.10 if you had to sell that stock immediately to the same firm. If you had invested $5,000 at the $0.10 offer price, the market maker’s repurchase price, at $0.04 bid, would be only $2,000; thus you would lose $3,000, or more than half of your investment, if you decided to sell the stock. In addition, you would have to pay compensation (a “mark-up,” “mark-down,” or commission) to buy and sell the stock. \1/4\ In addition to the amount of the spread, the price of your stock must rise enough to make up for the compensation that the dealer charged you when it first sold you the stock. Then, when you want to resell the stock, a dealer again will charge compensation, in the form of a markdown. The dealer subtracts the markdown from the price of the stock when it buys the stock from you. Thus, to make a profit, the bid price of your stock must rise above the amount of the original spread, the markup, and the markdown.
Most penny stocks are sold to the public on an ongoing basis. However, dealers sometimes sell these stocks in initial public offerings. You should pay special attention to stocks of companies that have never been offered to the public before, because the market for these stocks is untested. Because the offering is on a first-time basis, there is generally no market information about the stock to help determine its value. The federal securities laws generally require broker-dealers to give investors a “prospectus,” which contains information about the objectives, management, and financial condition of the issuer. In the absence of market information, investors should read the company’s prospectus with special care to find out if the stocks are a good investment. However, the prospectus is only a description of the current condition of the company. The outlook of the start-up companies described in a prospectus often is very uncertain.
Low-priced securities are subject to settlement fees if they are non-DTC-eligible securities. The Depository Trust Company (DTC) provides clearing, settlement and information services for certain securities. Certain low-priced securities are not DTC-eligible or have had their eligibility revoked. As a result, the settlement of these physical positions can carry significant pass-through charges for our clearing firm COR Clearing LLC, including execution fees, DTC fees, deposit fees, New York window fees, and transfer agent fees. These fees, which can vary and may be substantial, increase the cost that COR Clearing LLC, passes through for clearing and execution.
Customers who trade penny stocks and non-DTC-eligible securities are responsible for these charges, which can be as high as 10 times the value of the trade. Orders that require executions with multiple contra- parties will result in settlement fees for each separate transaction. Neither Stock USA/SpeedTrader nor COR Clearing LLC mark up any of these fees before they are passed through to customers. These pass- through charges may not be immediately charged to a customer account following a trade in non-DTC-eligible securities, as our clearing firm may receive notice of such fees several weeks following the trade. Stock USA/SpeedTrader reserves the right to withhold funds in a customer account pending potential assessment of fees associated with trading in low-priced securities. It is your responsibility to investigate the eligibility status of a low-priced equity before trading it. You should contact the specific company whose equity you intend to trade to confirm eligibility.
Your sale of a low-priced security may be reversed with a forced by-in executed at the current market price, leading to potential large losses. The National Securities Clearing Corporation (NSCC), a subsidiary of DTC, enforces an “Illiquid Requirement” onto the clearing firm when one customer (or more than one customer in the aggregate, across the totality of customers of COR Clearing LLC’s correspondents) whose account is carried by COR Clearing LLC sells more than 25% of the average daily trading volume of a security over the last rolling 20 business days.
The Illiquid Requirement is a deposit (“charge”) that the Clearing firm is required to post under certain circumstances. The amount of this requirement depends on the percentage of the ADV (Average Daily Value) represented by the open sales. The requirement has very little relation to the value of the trade, and is generally at least ten times the trade value and may be as high as one hundred times the trade value, or even more. This requirement is incurred even if the customer owns the shares and even when COR Clearing LLC has these shares long in its DTC account. If COR Clearing LLC customer creates a NSCC Illiquid Charge greater than $50,000, the offending trade or trades may be bought in on T + 1, without notice to the customer. If a customer creates a second NSCC Illiquid Charge greater than $50,000 in a ninety day period, in addition to the buy-in, the customer account may be subject to closure for ninety days.
In addition to the amount of the spread, the price of your stock must raise enough to make up for the compensation that the dealer charged you when it first sold you the stock. Then, when you want to resell the stock, a dealer again will charge compensation, in the form of a markdown. The dealer subtracts the markdown from the price of the stock when it buys the stock from you. Thus, to make a profit, the bid price of your stock must rise above the amount of the original spread, the markup, and the markdown.
For more information about penny stocks, buying penny stocks online, trading penny stocks and the risks associated with the penny stock trading, please contact the Office of Filings, Information, and Consumer Services of the U.S. Securities and Exchange Commission, 450 Fifth Street, NW. Washington, DC 20549, (202) 272-7440.
Account Security & Protection
Is my online trading account insured?
Our clearing firm’s policy through Lloyd’s of London (Lloyd’s) provides additional account coverage up to $24.5 million (including up to $900,000 in cash) per client as defined by SIPC rules. With both SIPC and Lloyd’s of London coverage, accounts are protected up to a total of $25 million per client (as defined by SIPC rules) including up to $1 million for cash balances.
*This coverage does not protect against loss of market value of securities.
Clients must read, understand and agree to follow all Regulatory, Exchange and Stock USA Execution Services, Inc. (SUSA) rules, policies and procedures, as set forth in the Trader Responsibilities.
IMPORTANT NOTICE: The procedures and rules set forth are for informational purposes and may be subject to change or update without notice. This is only a partial list of the client’s responsibilities. Additional information can be found online at:¬†www.speedtrader.com. Clients must understand that they have far more responsibilities than are or can be listed here. If you have any questions about any of your responsibilities, please contact Stock USA Execution Services, Inc. (SUSA).
ACCOUNT REVIEW:¬†Minimum Funding Requirement $30,000 Foreign Margin and Option Accounts Only ‚Äď No Cash Accounts Broker Assisted Transactions $30.00
We encourage clients to sign up for “Electronic Delivery”. Clients are responsible for maintaining a current address and/or email address with SUSA. Inactivity Fee: $30.00 will be charged quarterly if 15 trades are not executed during the calendar quarter. Stock USA will not issue checks for credit balances under $25.00 Stock USA does not accepts checks for deposit/withdrawal; ACH and Wires Only
It is always the client’s responsibility to review their account daily, through COR Clearing, LLC (The clearing firm) at their website¬ www.corclearing.com and compare the information shown there versus the information displayed on the trading software. If there is any discrepancy of any kind including but not limited to; current equity, buying power, or positions; you must contact SUSA PRIOR TO ACTING ON ANY INFORMATION THAT DOES NOT MATCH. Also if you ever believe for any reason that anything is incorrect in your account, please make sure you always contact SUSA before acting. If you act before contacting SUSA to verify the validity of your account information or fail to review the account on a daily basis, any issues that arise as a result of not reviewing the information or contacting SUSA in a timely manner (within 10 calendar days) after the event will be solely the client’s responsibility.
It is the client’s responsibility to notify SUSA, immediately to: cancel contracted services or close the account, any inaccuracies, discrepancies or complaints; in writing, within 10 calendar days of the event to:[email protected] or in writing to: Stock USA Execution Services, Inc., Attn: Compliance, 1717 Route 6, Suite 102 Carmel, New York 10512
Absent receipt of written notification, SUSA will consider the account to be active and in good order. Applicable account fees, including but not limited to inactivity fee, paper statement and confirmation fees. Any trading platform software fees will continue, without interruption. In the even you become indebted to SUSA in the course of operation of this account, and such indebtedness, upon demand is not paid by you, SUSA may close the account and liquidate the assets in the account in the amount sufficient to pay the indebtedness.
TRADING:¬†Clients are solely responsible for any order(s) placed in the account or by your user. Clients must be sure to keep user names and passwords secure and NOT allow any other party to have access to that information. Any orders placed in the client’s account through your user or user IDs are considered valid. The client will be responsible for any execution or cancellation of those orders regardless of the timing of the order(s). Limit orders placed and left outstanding in the client’s account may be executed at any time, including in pre-market or after-hours trading. Clients are responsible for cancelling any order(s) they do not want executed.
STOCK SPLITS, SYMBOL CHANGES & OPTIONS:¬†It is the client’s responsibility to notify SUSA if they hold any security that has either a forward or reverse stock split and/or if any security owned has a symbol change of any kind. The client will also need to contact SUSA if they are holding an option that has expired, been exercised, want to exercise, been assigned, had a dividend and/or stock split adjustment, or a symbol change. The trading software will NOT automatically adjust for these changes. The client will need to contact SUSA to manually adjust the trading software to reflect these changes.
MARGIN:¬†The client is responsible for all losses in the margin account, including but not limited to trading losses.¬†There are 2 types of margin buying power available ‚Äď Overnight (2:1) and Day Trading (4:1). Overnight buying power is limited to two times the available cash at the end of the preceding day. Overnight positions held above two times equity will result in a Regulation T Federal margin call. You may have up to 5 business days to cover an overnight call by either sending in new funds for the amount of the call or liquidating positions (2X the amount) to meet the call. If positions are liquidated to meet this call, the account may be restricted or closed. If new funds are not deposited or positions are not sold to cover the amount of the call when due SUSA will be forced liquidate the position.
Day Trading buying power is applied to securities that are day traded (buys and sells in the same day). For margin accounts with equity above $25,000, the margin is set at 4:1 and there is no limit to the number of day trades that can be transacted. Note that overnight positions must not exceed 2:1 margin. For accounts under $25,000 there is a limit of 3 day trades total in any 5 consecutive business day period. Overnight positions are not affected by this limitation. If you violate this rule your account may be restricted or closed. It is the client’s responsibility to abide by these rules. The electronic order entry software systems provided to you by the firm cannot do this on your behalf.
Buying power is set at the beginning of the day and generally will not be increased for the remainder of the day (covering overnight positions will not increase buying power). When you have overnight positions your available buying power will generally be computed as follows: 30% (minimum maintenance) for short positions and 25% (minimum maintenance) for long positions subtract both figures from the equity and double what is left over. These percentages may be subject to change or differ by the security’s margin requirements.¬
There are also increased margin requirements when shorting low priced securities. The minimum margin requirement is $2.50 per share. Therefore securities trading under $2.50 per share will be held at $2.50 the minimum requirement. Securities trading between $2.50 and $5 will be held to 100% requirement. Securities above $5 per share will be held to a minimum requirement of $5 per share and then the regular short requirements thereafter.
A margin call will be issued if transactions in the account exceed the day trading buying power at any point during the day. This day trading (DT) call must be met with cash only within 7 business days. The cash deposited to meet the day trading call can be withdrawn after 3 business days, as long as the funds are not used for trading and there is enough excess cash in the account to withdraw the deposited funds. If the DT call is not met when due the account will be restricted from trading for 90 days. Repeated restrictions could result in the account being closed.
SUSA will generally attempt to contact you about any margin calls due. Notice may be sent by e-mail, phone or by other means available. Clients must strictly adhere to all margin rules. Please be aware that SUSA is in no way obligated to inform clients’ of margin calls due. It is the client’s responsibility to monitor the account at all times. SUSA may be forced to liquidate positions to meet the margin call at any time with or without notice. The clearing firm may choose to stop extending any credit or close the account for repeated violations. Also instructions received requesting a check or wire transfer will not be honored unless there is at least enough cash available to pay the amount requested.
If a client places trades prior to the current day’s buying power loading at approximately 7:00 a.m., the client will still see the previous day’s buying power figures. It is the client’s responsibility to calculate buying power when trading pre-market. Any margin calls resulting from using the previous day’s buy power will be valid calls and can only be met by depositing funds.
SHORT SALES:¬†The term ‘Short Sale’ means any sale of a security, that the seller does not own, or any sale which is consummated by the delivery of a security, borrowed by, or for the account of the seller. For securities that are hard to borrow, short sales must be preceded by a request to SUSA to make sure the security can be borrowed. SUSA will contact our clearing firm’s Stock Loan Department to ensure the availability of the security in question. If approval is granted by the clearing firm Stock Loan Department, SUSA will inform you that the security can be sold short. If approval is not received the security in question cannot be shorted. If a client shorts a security that has not been located, the transaction may be cancelled or result in a buy-in, and the client will be responsible for any losses incurred. All trades that violate the rule will be removed from the account and all losses will be charged back to the account. The rules do not allow for a client to profit from such trades. Repeated violations of the rules may result in the account being closed. If approval is received and the security in question can be “shorted”, the short sale must take place as “sell short”. If a sell is used to place a short sale or over-sell a position; if the order is executed this would be a violation of the rules. It is the client’s sole responsibility to cover any such position immediately with a corresponding buy. The trade(s) will be removed from the account. The client is solely responsible for any losses and the rules do not allow for a client to profit from such trades. Any such trades must be reported to SUSA via email: [email protected] by the end of the trading day.
EQUITY REQUIREMENT:¬†The amount of equity required to open and maintain a pattern day-trading account is $25,000. If the equity falls below this amount additional funds must be deposited to bring the equity back up to $25,000. If the minimum equity is not maintained, the account may become a regular margin account with buying power determined by the clearing firm and limited to 3 day-trades in a five day period. Positions held overnight do not count as day-trades.
ILLIQUID STOCKS:¬†All clients of SUSA in aggregate cannot trade in excess of 10% of the previous 20 business day average trading volume of any stock on any day regardless of the stock’s price. In addition, for stocks trading below $1 per share, clients cannot ever trade more than 25% of the current day’s trading volume. There also cannot at any time ever be more than 5,000,000 shares of any one stock settling during any 3 business day settlement period for our entire firm. If a client trades in excess of these restrictions, then their accounts will be subject to fees and interest charges and possible buy in or sell out of the violating position during the 3-day settlement period of those trades. There will be a $300 fee for any trade that is in violation of this policy. The interest charges will then be assessed on an illiquidity requirement imposed on the clearing firm, which could be many times the value of the trade. The interest rates charged to clients who violate these restrictions will be a minimum overnight rate of 15% of the illiquidity requirement.
These are only guideline amounts and lower trading volumes can also trigger illiquid charges, which will be passed through as well. Repeated violations of this policy will result in the account being closed.¬
ROUTING AND OTHER FEES:¬ The routing fees on the website and as set in the software are subject to change at any time, without notice. The client is solely responsible to know and verify the correct fee for any route prior to placing a trade. If necessary, SUSA reserves the right to charge or adjust for venue, routing, or exchange fees, to mark up or adjust any routing fees at our sole discretion. Clients are responsible to know all the account and other fees listed on our site and must understand that there may be other additional fees for services that are not listed.
ORDER ROUTING QUARTERLY REPORT SEC RULE 606:¬†In accordance with Regulation NMS Rule 606(b)(1) a customer can request the identity of the venue to which the customer’s orders were routed for execution in the six months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any that resulted from such orders. HARD COPY OF THIS REPORT IS AVAILABLE UPON REQUEST ‚Äď FREE OF CHARGE. Price improvement is available under certain market conditions. SUSA posts quarterly order routing execution reports at:¬†www.speedtrader.com. For additional information or to request a “Hard Copy” or “Identity of the Venue Disclosure”, please contact SUSA.
DISCLAIMER:¬†System response, trade executions and account access may be affected by market conditions, system performance, quote delays and other factors. The risk of loss in electronic trading can be substantial. Therefore consider whether such trading is suitable for you in light of your financial resources and circumstances. SUSA cannot and will not be held responsible for losses resulting from issues with the use of third party software quoting systems or third party order execution routing issues. SUSA only provides clients with the ability to connect to quoting software and order execution routes, SUSA does not own or control such services.
STATEMENT OF FINANCIAL CONDITION:¬†Stock USA Execution Services, Inc., Statement of Financial Condition is available upon request, free of charge.
It is the client’s responsibility to notify SUSA, immediately to: cancel contracted services, close the account, any inaccuracies, discrepancies or complaints; in writing, within 10 calendar days of the event to: [email protected] or in writing to: Stock USA Execution Services, Inc., Attn: Compliance, 1717 Route 6, Suite 102 Carmel, New York 10512. Absent receipt of written notification, SUSA will consider the account to be active and in good order. Applicable account fees, including but not limited to inactivity fee, paper statement and confirmation fees and service fees by contract, will continue, without interruption. In the event you become indebted to SUSA in the course of operation of this account, and such indebtedness, upon demand is not paid by you, SUSA may close the account and liquidate the assets in the account in the amount sufficient to pay the indebtedness.
Business Continuity Plan Statement
Stock USA Execution Services, Inc. (“SUSA”) has developed and tested a Business Continuity Plan on how SUSA will respond to events that significantly disrupt its business. Since the timing and impact of disasters and disruptions is unpredictable, SUSA will have to be flexible in responding to actual events as they occur. With that in mind, SUSA is providing this information on its business continuity plan.
Contacting SUSA:¬†If after significant business disruption clients cannot contact SUSA at (800) 874-3039; U. S. clients should call the SUSA emergency number (845) 531-2487; Foreign Clients should call SUSA emergency number (845) 531-2487 or go to our web site¬†www.speedtrader.com for further instruction during a significant business disruption.
Stock USA Execution Services, Inc.’s Business Continuity Plan:¬†SUSA plans to quickly recover and resume business operations after a significant business disruption and respond by safeguarding its employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing customers to transact business. In short, the business continuity plan is designed to permit SUSA to resume operations as quickly as possible, given the scope and severity of the significant business disruption.
The business continuity plan addresses: data back-up and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring customers prompt access to their funds and securities if SUSA is unable to continue its business.
SUSA’s clearing firm, COR Clearing LLC, Member FINRA, MSRB, and SIPC backs up important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, SUSA has been advised by its’ clearing firm that their objective is to restore their own operations immediately or as soon as possible, depending on the damage to the facility. Clients’ orders and requests for funds and securities could be delayed during this period.
Varying Disruptions: Significant business disruptions can vary in their scope, such as affecting: only SUSA; a single building housing SUSA; the business district where SUSA is located; the city where SUSA is located; or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only SUSA or a building housing SUSA, SUSA will transfer its operations to a prearranged local site when needed and expects to recover and resume business within one day. In a disruption affecting its business district, city, or region, SUSA will transfer its operations to a prearranged site outside of the affected area, and recover and resume business within one week. In either situation, SUSA plans to continue in business, transfer operations to its clearing firm, if necessary, and notify clients through its web site,¬†www.speedtrader.com or a customer emergency number: (845) 225-5132 ( only to be used if (800) 874-3039 is unavailable). If the significant business disruption is so severe that it prevents SUSA from remaining in business, SUSA will assure its customer’s prompt access to their funds and securities.
For more information ‚Äď If you have questions about the business continuity plan, you can contact SUSA at (800) 874-3039.
Customer Identification Program Notice
Important Information You Need to Know About Opening a New Account with Stock USA Execution Services
To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account. This Notice answers some questions about Stock USA’s Customer Identification Program.
What types of information will I need to provide?
When you open an account, Stock USA is required to collect information such as the following from you:
For Institutional Customers:
A corporation, partnership, trust or other legal entity will be asked to provide its principal place of business, local office and tax identification number. Other documents may need to be provided from certain institutions, such as certified articles of incorporation, government-issued business license, a partnership agreement, trust agreement and/or other documents.
For Retail Customers (Individuals):
Date of birth Physical Address
U.S. Citizen: taxpayer identification number (social security number or employer identification number)
Non-U.S. Citizen: taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence, and a photograph of you.
You may also need to show your driver’s license or passport
U.S. Department of the Treasury, Securities and Exchange Commission, and FINRA rules already require you to provide most of this information. These rules also may require you to provide additional information, such as your net worth, annual income, occupation, employment information, investment experience and objectives, and risk tolerance.
What happens if requested information is not provided or my identity can’t be verified?
Stock USA may not be able to open an account or carry out transactions for you. If Stock USA has already opened an account for you, they may have to close it.
We thank you for your patience and hope that you will support the financial industry’s efforts to deny terrorists and money launderers access to America’s financial system.
Extended Hours Trading Risk Disclosure
Risk of Lower Liquidity.¬†Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular market hours. As a result, your order may only be partially executed, or not at all.
Risk of Higher Volatility.¬†Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended hours trading than you would during regular market hours.
Risk of Changing Prices.¬†The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular market hours, or upon the opening the next morning. As a result, you may receive an inferior price in extended hours trading than you would during regular market hours.
Risk of Unlinked Markets.¬†Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours trading system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.
Risk of News Announcements.¬†Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
Risk of Wider Spreads.¬†The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.
Margin Account Disclosure Statement
COR Clearing (“COR”) is furnishing this document to you to provide some basic facts about purchasing securities on margin and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review the COR Margin Agreement. Consult your broker or COR regarding any questions or concerns you may have with your margin accounts. When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price from COR. If you choose to borrow funds from COR, you will open a margin account with COR. The securities purchased are COR’s collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, OR can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts held with COR in order to maintain the required equity in the account. It is important that you fully understand the risks involved in trading securities on margin. These risks include the following:
You can lose more funds than you deposit in the margin account. A decline in the value of securities that are purchased on margin may require you to provide additional funds to COR to avoid the forced sale of those securities or other securities or assets in your account(s).
COR can force the sale of securities or other assets in your account(s). If the equity in your account falls below the maintenance margin requirements or COR’s higher “house” requirements, COR can sell the securities or other assets in any of your accounts held at COR to cover the margin deficiency. You also will be responsible for any short fall in the account after such a sale.
COR can sell your securities or other assets without contacting you. Some investors mistakenly believe that a firm must contact them for a margin call to be valid, and that the firm cannot liquidate securities or other assets in their accounts to meet the call unless the firm has contacted them first. This is not the case. COR or your broker will attempt to notify its customers of margin calls but is not required to do so.
However, even if COR or your broker has contacted you and provided a specific date by which you must meet a margin call, COR or your broker can still take necessary steps to protect its financial interests, including immediately selling the securities without notice to you.
You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold by
COR to meet a margin call. Because the securities are collateral for the margin loan, COR has the right to decide which security to sell in order to protect its interests.
COR can increase its “house” maintenance margin requirements at any time and is not required to provide you advance written notice. These changes in COR’s policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause COR to liquidate or sell securities in your account(s).
You are not entitled to an extension of time on a maintenance margin call. While an extension of time to meet margin requirements may be available to you under certain conditions, you do not have a right to the extension.
Pattern Day Traders
Per FINRA Rule 4210, an account is classified as a pattern day trader when the account day trades four or more times over five trading days. Accounts, which are classified as pattern day traders, are required to maintain a minimum equity of $25,000. Day trading accounts are also subject to special margin requirements called “Day Trading Buying Power.” Day trading buying power is calculated by taking the account equity at the close of the previous day less any regulatory maintenance requirement as stated in the rule multiplied by four (4) for equity securities. Other security type requirements are determined based on their specific regulatory requirement. COR Clearing uses the “Time and Tick” method for calculating day trade violations.
Overnight Buying Power Release
You cannot use “Day Trading Buying Power” to hold positions overnight.¬†If you make a decision to hold a position overnight, you must liquidate that position before you buy more of that same position. When you cover a position you held overnight, the trading software platform will release buying power. This release will show up in both your intraday and overnight buying power numbers on the software. The overnight buying power amount shown on the software is only informational. It does not actually limit you to only trading that amount because the software does not know how long you will hold a position when you open it. This release into your intraday buying power CANNOT be used for intraday trading (day trading). If you intraday trade (day trade) you must use the initial intraday buying power you had before you covered the overnight position and the additional buying power was released. You cannot use the additional buying power released for new day trades. It can¬†ONLY¬†be used for taking new overnight positions. If you do use the additional buying power for new intraday trades (day trades), more than likely you will be subject to a day trading (DT) margin call. That type of call can ONLY be met by depositing funds. If you do not deposit funds to meet the call, your account will be restricted for 90 days which means you will only be allowed to trade once a day up to 2 times the aggregate excess in the account until the call due date. After the call due date the account can only trade 1 time the aggregate of cash available until the 90 day restriction is lifted.
The DT Margin Call must be met in order to remove the restriction. If you meet the call and you do not use the funds, those funds can be returned after three (3) full business days.
Short Selling –¬†The margin maintenance requirements are listed below:
- 30% * Stock Value
- 30% * Stock Value if Stock Value > $16.67
- $5.00 if Stock Value < $16.67 and > $5.00 100% * Stock Value if Stock Value < $5.00
- $2.50 if Stock Value <= $2.50
If you have questions, or need help calculating your buying power, please contact¬†www.speedtrader.com ‚Äď Live Chat.
Day Trading Risk Disclosure Statement
As per FINRA Rule 2270, we must disclose information to individuals that will practice day trading strategies. You should consider the following points before engaging in a day-trading strategy. For the purpose of this notice, a “day trading strategy” refers to an overall trading strategy characterized by the regular transmission by a customer of intra-day orders to effect both purchase and sale transactions in the same security or securities.
Day trading can be extremely risky. Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance. You may occur large capital depreciation of funds due to trade risks of day trading. In particular, you should not fund day-trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 or more will in no way guarantee success.
Be cautious of claims of large profits from day trading. You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses.
Day trading requires in-depth knowledge of the securities markets and trading techniques and strategies. In attempting to profit through day trading, you must compete with professional licensed traders employed by securities firms. You should have appropriate experience before engaging in day trading.
Day trading requires knowledge of a firm’s operations. You should be familiar with a securities firm’s business practices, including the operation of the firm’s order execution systems and procedures. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to systems failures.
Day trading will generate substantial commissions, even if the per trade cost is low. Day trading involves aggressive trading, and generally you will pay commissions on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings. For instance, assuming that a trade costs $16 and an average of 29 transactions are conducted per day, an investor would need to generate an annual profit of $111,360 just to cover commission expenses. Day trading on margin or short selling may result in losses beyond your initial investment. When you day trade with funds borrowed from a firm or someone else, you can lose more than the funds you originally placed at risk. A decline in the value of the securities that are purchased may require you to provide additional funds to the firm to avoid the forced sale of those securities or other securities in your account. Short selling as part of your day-trading strategy also may lead to extraordinary losses, because you may have to purchase a stock at a very high price in order to cover a short position.
Potential Registration Requirements
Persons providing investment advice for others or managing securities accounts for others may need to register as either an “Investment Advisor” under the Investment Advisors Act of 1940 or as a “Broker” or “Dealer” under the Securities Exchange Act of 1934. Such activities may also trigger state registration.
Payment for Order Flow
Stock USA Execution Services, Inc. receives compensation on a per-share or per-contract basis for directing order flow to selected exchanges and brokers- dealers. Customers can request that Stock USA disclose to its customer the identity of the venue to which the customer’s orders were routed for execution in the six months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any that resulted from such orders. HARD COPY OF THIS REPORT IS AVAILABLE UPON REQUEST. FREE OF CHARGE. Price improvement is available under certain market conditions. We post quarterly order routing execution reports at:¬ www.speedtrader.com.
For additional information or to request a ‘Hard Copy” or “Identity of the Venue Disclosure”, please contact us in writing or by email as follows:
Stock USA Execution Services, Inc.
1717 Route 6, Suite 102
Carmel, NY 10512
(800) 874-3039 from 8:00 a.m. to 5:00 p.m. EST or fax (845) 622-4878