Lock-in shares in SEC

hunter · 1 Lock-in shares in SEC Wed Jun 08, 2011 10:12 am

hunter

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One of my friends does and interesting thing. He is so sure one of the shares will appreciate exponentially for next 5 years. To prevent him get tempted and sell early, he locks in these shares in SEC. When locked in, he cannot sell them until unlocked.

This is the first time I heard anyone wanted doing it.

nuwank · 2 Re: Lock-in shares in SEC Wed Jun 08, 2011 1:39 pm

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When you invest in a share, you invest a part of a company. So, you have to think of it as a business. If you had your own business, would you value your business on a day to day basis? I think not. You have to view investing in a share of a company the same way. If the company is going to do well in the future, why would you want to sell the share or even want to know what the share price is on a day to day basis. This is real investing. Look at anyone who has made money as an investor on the Forbes rich list. They have held their investments for long, long, long time. That's why Buffett say that his holding time is "forever". He also says that when you invest in a company, you buy it thinking that the stock market will be closed for 5 or 10 years.

milanka · 3 Re: Lock-in shares in SEC Wed Jun 08, 2011 2:45 pm

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@nuwank , explained nicely , good work + rep too

Antonym · 4 Re: Lock-in shares in SEC Wed Jun 08, 2011 3:42 pm

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@hunter: Hats off to your friend! As you have rightly pointed out, there are very few such investors on the CSE. The easy gains of 2009 & 2010 have made the stock market an alternative to the gambling room, for some people.

I myself hold more than 70% of my portfolio (shares that I do not intend to sell in the near future) in a 'locked balance'.

2011_NewComer · 5 Re: Lock-in shares in SEC Wed Jun 08, 2011 6:52 pm

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@Antonym -
I'm interested about this...can remember you mentioning about this earlier also.

how do you lock them? The ones you have bought from market? (if we buy from an IPO we can select that option in the form I think).
You do it through your broker? and how to unlock and how long will it take to lock or unlock a share?
And is there a minimum amount that we need to lock or can we even lock 200, 300 shares?

many questions...
Smile

Antonym · 6 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:12 pm

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@2011_NewComer: For transferring the shares that you have bought from the secondary market, there is a very simple form to be filled - Form CDS 6(A): 'Request for intra-account transfer of securities'.

Just fill in your name, account number and the quantity & company code of the shares to be transferred from your trading balance to your locked balance (or vice versa).

This form needs to be submitted through your broker. There is a space where the broker has to authenticate your signature and authorize the transfer to locked balance. For me, the entire process took only 2 days.

There is no minimum number of shares to be transferred. It's like having your shares in a 'fixed deposit'. If you so wish, you can transfer the locked shares back to your trading account, with no charges involved.

2011_NewComer · 7 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:18 pm

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Thanks for the explanation Antonym +rep
Smile

Fresher · 8 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:49 pm

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I too would have done this but one this I understand prevented me doing it.
That is, you will not get the 50% margin from the broker for the locked balance in CDS. Correct me if I'm wrong.

I do not use the credit much but i use it to make purchases when an opportunity arises.

Antonym · 9 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:59 pm

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You are probably right about not getting the 50% margin on locked shares.

For me, that aspect doesn't matter because I have decided not to buy shares with credit or borrowed funds.

Fresher · 10 Re: Lock-in shares in SEC Wed Jun 08, 2011 8:02 pm

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Antonym wrote:You are probably right about not getting the 50% margin on locked shares.

For me, that aspect doesn't matter because I have decided not to buy shares with credit or borrowed funds.

I too try my best not to use too much of credit. why i need is because ill lose interest keeping money at the broker. so i have taken an overdraft against my FD and it's ready to pay the broker within T+3/5 if i buy using the credit. Smile

Tiger · 11 Re: Lock-in shares in SEC Wed Jun 08, 2011 9:45 pm

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Locking shares or having long term approach is very good, however you need to be aware of the price fluctuations. As you all know markets behave on sentiments, thus there are periods where even fundermentally strong shares trade at premium.
You can cash in such times.

So in my opinion, always keep a sense of intrinsic value of a share.

2011_NewComer · 12 Re: Lock-in shares in SEC Sat Jun 11, 2011 9:13 am

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I have another question regarding locked in shares..
Antonym or anyone who has experience please answer Smile

If I have lockedin shares are they shown in my online trading system under my portfolio or will they be shown somewhere separately(using dfn tws).

Are they given in the CDS account statement I get monthly?

thanks

Antonym · 13 Re: Lock-in shares in SEC Sat Jun 11, 2011 12:44 pm

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npp wrote:
I too try my best not to use too much of credit. why i need is because ill lose interest keeping money at the broker. so i have taken an overdraft against my FD and it's ready to pay the broker within T+3/5 if i buy using the credit.

@npp: I think your approaches of not being over-dependant on credit and minimizing the net interest cost is admirable.

Tiger wrote:
Locking shares or having long term approach is very good, however you need to be aware of the price fluctuations. As you all know markets behave on sentiments, thus there are periods where even fundermentally strong shares trade at premium.
You can cash in such times.

So in my opinion, always keep a sense of intrinsic value of a share.

@Tiger: You are absolutely right; investors need to be aware of what their share is worth - and cash in when the price has run too far ahead of fundamentals.

2011_NewComer wrote:
If I have lockedin shares are they shown in my online trading system under my portfolio or will they be shown somewhere separately(using dfn tws).

Are they given in the CDS account statement I get monthly?

@2011_NewComer: Good question... Your locked shares are not displayed in your online trading portfolio (just as a Bank FD is not displayed in your savings account).
The monthly CDS account statement is a complete view of your transactions and balances; the locked shares are shown separately, so you know that they are there.

2011_NewComer · 14 Re: Lock-in shares in SEC Sat Jun 11, 2011 3:51 pm

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thanks Antonym. That's what I wanted to know 'how to know that they are there safely' Very Happy

. Now clear.

StocksWatch · 15 Re: Lock-in shares in SEC Sat Jun 11, 2011 4:06 pm

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I also learnt a lot about this subject by this thread. Thanks antonym and others.

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Lock-in shares in SEC

1 Lock-in shares in SEC Wed Jun 08, 2011 10:12 am

hunter

2 Re: Lock-in shares in SEC Wed Jun 08, 2011 1:39 pm

nuwank

3 Re: Lock-in shares in SEC Wed Jun 08, 2011 2:45 pm

milanka

4 Re: Lock-in shares in SEC Wed Jun 08, 2011 3:42 pm

Antonym

5 Re: Lock-in shares in SEC Wed Jun 08, 2011 6:52 pm

2011_NewComer

6 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:12 pm

Antonym

7 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:18 pm

2011_NewComer

8 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:49 pm

Fresher

9 Re: Lock-in shares in SEC Wed Jun 08, 2011 7:59 pm

Antonym

10 Re: Lock-in shares in SEC Wed Jun 08, 2011 8:02 pm

Fresher

11 Re: Lock-in shares in SEC Wed Jun 08, 2011 9:45 pm

Tiger

12 Re: Lock-in shares in SEC Sat Jun 11, 2011 9:13 am

2011_NewComer

13 Re: Lock-in shares in SEC Sat Jun 11, 2011 12:44 pm

Antonym

14 Re: Lock-in shares in SEC Sat Jun 11, 2011 3:51 pm

2011_NewComer

15 Re: Lock-in shares in SEC Sat Jun 11, 2011 4:06 pm

StocksWatch

16 Re: Lock-in shares in SEC

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