Frequently Asked Questions

Frequently Asked Questions My Account
Funding and Transfers

Stock Deposit

Trading
Margin
Options
Retirement
Security Center

My Account

What are the commission rates at The Dedicated Broker ?
At The Dedicated Broker , We offer our dedicated broker services whereby you speak to your broker for a straight forward and clear fee structure of $50 minimum plus 0.015 cents a share.
What is included in calculation of my balance?
Your account balance includes all cash, money market funds, stocks, exchange traded funds (ETFs), mutual funds and options in your account. Margin loans, if any, do not count toward your balance. Balances from separate accounts are not combined in determining the qualification.
Does The Dedicated Broker pay interest on credit balances?
Yes. By default, cash balances of $500 or more earn an annual interest rate of 0.025% (as of 12/01/2011). If your cash balances are swept into a money market portfolio, you will earn the current interest rate for that portfolio. Money market rates are updated regularly on our pricing details.
Can I trade futures?
Yes, you may trade futures at The Dedicated Broker . Please visit our Futures page for information on futures access, platforms, service, pricing, and deposits.
How do I make my initial deposit?
Choose the method that works best for you:
  • By Check
If you’re applying by mail, include a personal, cashier’s, or bank check made payable to First Southwest Company with your account application and send it to the appropriate address.
  • By Wire Transfer
Call us at 1.855.4.MY.BROKER for wire instructions or click on the link . A new account must be approved before a wire can be sent. Upon approval, you will be given an account number and receive the wire instructions.
Can I write checks from my account at The Dedicated Broker ?
The Dedicated Broker offers unlimited check writing. There is no per-check minimum amount. You can download the checking application online from our forms library once your account has been opened. Please note: your account at The Dedicated Broker is not FDIC-insured or bank guaranteed.
Do you offer investment advice?
Yes, please speak to your account executive for details.
Can I download account information directly to Quicken and Microsoft Money?
Yes, users of Quicken and Microsoft Money can download their account with The Dedicated Broker information into their Quicken or Money personal finance software.
Can I get duplicates of my trade confirmations and monthly statements?
If you would like a third party (such as your accountant or tax advisor) to receive a duplicate copy of your statements and confirmations, simply send us the interested party’s name and complete address. The person you have designated will receive a duplicate copy of confirmations and statements by mail. Please see our fee schedule.

Funding and Transfers

How do I deposit funds into my account at The Dedicated Broker ?
You can fund your account in any of the following ways:
  • Deposit a Check
  • Deposit via Wire Transfer
  • Transfer a Brokerage Account to The Dedicated Broker
How do I transfer my brokerage account to The Dedicated Broker from another broker?
a. First, open an account with The Dedicated Broker.
b. Once your account is opened, you will be able to transfer an account from another brokerage through our ACAT system. Please see our forms library.
Are there any restrictions on funds deposited into my account with The Dedicated Broker?
Yes. You may trade most marginable securities immediately after funds are deposited into your account, however, funds cannot be withdrawn or used to purchase non-marginable securities, initial public offering (IPO) stocks or options until 3 business days after check deposit settlement and three business days for electronic funding deposit settlement. All electronic deposits are subject to review and may be restricted for 5 business days. Read Funding Restrictions for more information.

Stock Deposit

Can I deposit a physical stock certificate into my account at The Dedicated Broker?
Yes, complete a stock certificate deposit form and send both the form and certificates directly to:
4910 13th Avenue
Brooklyn, NY 11219
Does the The Dedicated Broker accept Pink Sheets listed stock certificates and OTC Bulletin Board listed stock certificates?
Yes. The Dedicated Broker will accept these certificates when your account has been established with our Dedicated Broker Department. Please call Your dedicated broker to review this process which will include a fee.
How do I endorse stock certificates over to The Dedicated Broker to open an account?
On the back of the certificate designate First Southwest Company as the attorney to transfer the stock. This means the securities are negotiable only by First Southwest Company, and can be mailed safely. Then all you need to do is sign and date the certificate; you can leave all the other areas blank. Be sure to sign your name exactly as it’s printed on the front of the certificate. Requirements may differ for entity and corporate accounts. Additionally, there may be additional paperwork needed when the account registration does not match the name(s) on the certificate. Please contact an account executive at The Dedicated Broker for more information.
On the front of the stock certificate, my name is printed “A.L. Smith”; should I sign the certificate exactly like that or should I sign my full name?
You must sign the certificate exactly as your name is printed on the front, including initials, Jr., Sr., III, etc.
I have other questions regarding certificates in my company name, custodial certificates and gifting of certificates. What should I do?
Simply contact a specialist at 855-469-2765, during regular business hours. We can help you with these or any other issues you may have regarding opening your account with stock certificates.

Trading

What seurities can I trade?
With The Dedicated Broker, you can invest in any stock or ETFs (Exchange Trade Funds). Any stock or ETF that trades on the NASDAQ, NYSE (New York Stock Exchange), or AMEX (American Stock Exchange). Some examples are MSFT (NASDAQ), LU (NYSE) and AVD (AMEX).
Do you allow day trading?
Yes. However If you are classified as a pattern day trader (PDT), you are required to maintain a minimum account balance of $25,000 at all times. According to securities regulation, you are considered a pattern day trader if you make more than 3 day trades (see definition below) within a period of 5 business day
What is a Day Trade?
A day trade is defined as opening and closing (buying and then selling, or short selling and then buying to cover) the same security on the same day.
Can I buy foreign ordinary shares?
Yes, with our Assisted Broker trading. If you are interested please call 1.855.4.MY.BROKER
Do you offer extended hours trading?
Yes, The Dedicated Broker does offer extended hours trading. Please speak to your account executive about this.
Can I trade OTC bulletin boards, pink sheets or penny stocks?
Yes. Over-the-counter bulletin board (OTCBB), pink sheets and penny stocks (hereafter OTCBB) can be bought and sold, through you dedicated broker. OTCBB securities usually represent shares of new or small companies which are traded by dealers via manual procedures. Investing in OTCBB securities can be very risky, and investors may lose all or part of their investment in a relatively short period of time. Accordingly, the trading rules for OTCBB securities differ significantly from listed or NASDAQ securities. For example, only limit orders to buy and limit or market orders to sell will be accepted for the regular market sessions. Quotes for OTCBB securities may not be accurate as the securities may trade on a manual basis, and frequently “real-time” quote information, or even firm quotes, may not be available. Investors should also be aware that frequent symbol changes, additions and delistings occur in the OTCBB market. Before placing an order for an OTCBB security, please review the OTCBB Securities Trading Rules. You should also take the time to carefully research the company and examine your investment objectives.
Can I trade mutual funds?
Yes. At The Dedicated Broker you’ll have access to many mutual funds. Before investing in a mutual fund, carefully consider the investment objectives, risks, charges and expenses. For a prospectus containing this and other important information, contact the fund or an Account Executive. Please read the prospectus carefully before investing

Margin

How does margin work?
Buying stocks on margin involves borrowing funds through The Dedicated Broker’s clearing firm, First Southwest Company and using these funds to buy margin-eligible securities.
What is the minimum account balance necessary to have a margin account?
The account must have a minimum account balance of $2,000 to maintain margin privileges.
Who sets margin requirements?
The Federal Reserve and FINRA both set minimum initial and maintenance margin requirements. Although the NYSE and FINRA require a minimum equity maintenance of 25%, broker dealers are allowed to impose higher equity maintenance requirements. Kensington The Dedicated Broker requires a minimum equity maintenance requirement of 30%.
What are the initial and maintenance margin requirements for purchasing listed securities at The Dedicated Broker?
The following requirements apply only to securities listed on the NYSE, AMEX, and NASDAQ. OTC Bulletin Board and Pink Sheets stocks are NOT margin eligible.
As governed by the Federal Reserve’s Regulation T, when a trader buys on margin, key levels must be maintained throughout the life of the trade. First off, a broker cannot extend any credit to accounts with less than $2,000 in cash (or securities). Second, the initial margin of 50% is required for a trade to be entered. Finally, the maintenance margin says that an equity level of at least 25% must be maintained. The investor will be hit with a margin call if the value of securities falls below the maintenance margin. Securities valued less than $3 per share are not margin-eligible and therefore may not be sold short.
What happens if my equity is not sufficient to meet the margin maintenance requirements?
Your account will be subject to a margin call if your equity does not meet margin maintenance requirements, and The Dedicated Broker Trading Margin Department will generally attempt to notify you as a courtesy.
Margin calls are due upon creation of the call. The Dedicated Broker, along with our clearing firm First Southwest Company, establishes a future due date as a courtesy notice. The Dedicated Broker in observation of regulatory policy, may sell your securities at any time without consulting you in order to meet the call. Typically, if you do not meet a call by the due date, your account will be considered “In Default” and The Dedicated Broker may liquidate positions in order to cover all outstanding calls prior to their individual due dates. Depending on market fluctuations, positions may be liquidated for a greater amount than the calls. If The Dedicated Broker liquidates any of your positions, you will be charged the broker-assisted commission rate.
I just sold some stocks or options in my account. Why is my buying power the same?
This is common in a cash account when a sell order has been placed but has yet to settle. In a cash account, the proceeds of a sell order do not increase your buying power until the trade settles, which is 3 business days after the trade date for stocks (T+3) and 1 business day for options (T+1).
Why did I receive a margin call when I have a cash account?
Cash accounts can receive a type of non-margin call called a “money due” call. This can happen if you make a purchase without sufficient funds in your account, perhaps due to price fluctuations after entering a market order, or due to fees assessed to your account.
Am I always buying on margin in a margin-enabled account?
No. When you purchase securities with a value less than or equal to that of your cash balance, you are not buying on margin, even in a margin-enabled account.
What is a Good Faith Violation?
A Good Faith (GF) Violation is generated in cash accounts when a client purchases a security with unsettled funds and then sells the security prior to settlement of those funds. Three (3) unmet GF Violations in any 12-month rolling period will result in your account being restricted to trading only with settled funds for a period of 90 days. If another GF Violation occurs during the 90-day period, the account may be restricted to all but closing transactions.

OPTIONS

What is a call option?
A call option is an option contract that gives the buyer the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.
What is a put option?
A put option is an option contract that gives the buyer the right (but not the obligation) to sell a stock, bond, commodity, or other instrument at a specified price within a specific time period.
What happens if I am long a call or put option?
If you are long a call option that is in the money at expiration by at least $0.01, you should expect to purchase the underlying shares at the strike price. If you have insufficient funds to cover the purchase, a margin call will be generated on your account and The Dedicated Broker may force a liquidation of the position at prevailing market prices.
If you are long a put option that is in the money at expiration by at least $0.01, you should expect to have the underlying shares sold short (unless you are long sufficient shares of the underlying stock) in your account at the strike price. You will be required to cover this position before the end of the trading day following expiration. For instance, if shares are sold in your account Friday, you will be required to cover that position the following Monday before 4 PM EST.
What happens if I am short a call or put option?
If you are short a call (stock option) that is in the money, you may be assigned on any given trading day leading up and to the last trading day prior to expiration day. Assignment to a call writer means you will have to sell the specified amount of underlying shares at the strike price. If this is an uncovered call, you will have to buy the underlying stock in the open market at the current market price so you may sell it to a call buyer at the strike price. If you do not have sufficient buying power to afford such a position, you may receive a margin call which can put you at risk of being sold out of that position.
If you are short a put (stock option) that is in the money, you may be assigned on any given trading day leading up and to the last trading day prior to expiration day. Assignment to a put writer means you will have to buy the specified amount of underlying shares at the strike price. If you do not have sufficient buying power to afford such a position, you may receive a margin call which can put you at risk of being sold out of that position.
How do I know if my options will expire, be exercised or assigned?
Check your option holdings frequently: options are considered in the money if the stock price is equal to or greater than $0.01 above or below the strike price depending on whether it is a call or a put. Under the current procedures, if the stock price is greater than or equal to $0.01 at expiration, it may be exercised automatically unless we receive “NOT to exercise” instructions from you by the close of trading on the third Friday of the expiration month. If you are short options, you may be assigned the underlying shares whether or not you want the resulting position(s).
What if I do not have enough buying power to afford the resulting stock position of an exercise or assignment?
The Dedicated Broker, pursuant to our User Agreement, cannot be exposed to market risk due to positions created in customer accounts and reserves the right to act accordingly. It remains the customer’s responsibility to ensure there is sufficient buying power to afford any resulting stock position. If you cannot meet a resulting call, please close your open positions prior to expiration. The Dedicated Broker reserves the right to liquidate stock or option positions if it deems that sufficient risk to the firm exists. In addition closing a position may result in a loss to the investor, and multi-leg strategies may result in additional commissions, fees and charges
How do I give exercise or NOT to exercise instructions for my options?
The majority of long equity options positions that expire in the money by $.01 or more will automatically be exercised on the Saturday following the 3rd Friday of that month unless we receive “NOT to exercise” instructions from you by the close of trading on the last trading day before expiration. To instruct us to exercise, please call your dedicated broker detailing which option you would like to exercise. You may give these instructions at any time, except for the last trading day of that particular option contract. These instructions must be received no later than 4:15 pm ET (1:15 pm PT) on the last trading day before expiration.
Will The Dedicated Broker close my long option positions if I submit “NOT to exercise” instructions?
No. “NOT to exercise” instructions will not be considered as standing instructions to close long option positions. It is the customer’s responsibility to address open positions in his account.
For example, if you are long a call or put that is in the money and you send “NOT to exercise” instructions, it is your responsibility to close that option position before it expires. If you do not close the position, it may expire worthless and you may lose the premium you paid for the option.
Where can I find more information about options?
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.
For more information on option contract terms and more, please check out
www.theocc.com
www.cboe.com
optionseducation.org

Retirement

What is an IRA account?
An Individual Retirement Account (IRA) is a tax-advantaged account designed to help you save for retirement. There are two main types, Roth and Traditional, each with different advantages.
*With a Roth IRA, you make contributions with money you’ve already paid taxes on (after-tax) and your money may grow tax-free, with tax-free withdrawals in retirement, provided that certain conditions are met.
*In a Traditional IRA, you make contributions with money you may be able to deduct on your tax return and any earnings potentially grow tax-deferred until you withdraw them in retirement.
In either case, the tax benefits allow your savings to grow, or compound, more quickly than in a taxable brokerage account.
Withdrawals
Withdrawals prior to age 59
Distributions from Traditional IRAs prior to age 59 are subject to a 10% penalty in addition to federal and state taxes. Under the following circumstances, you may be able to avoid a penalty on early withdrawals:
  • First time home purchase
  • Qualified education expenses
  • Death or disability
  • Unreimbursed medical expenses
  • Health insurance if you’re unemployed
No withdrawal restrictions at age 59
Starting at age 59, you can begin taking money out of your retirement accounts without penalty. Keep in mind that you’ll have to pay any federal or state taxes that might be due. You should also consider creating a plan for making withdrawals, so your funds provide the income you need throughout your lifetime.
Mandatory withdrawals at age 70
Turning 70 is a major milestone. If you have a Traditional IRA, that’s when you must begin withdrawals, or Minimum Required Distributions (MRDs). Here are a few basics to consider:
*Starting at 70, MRDs are generally required every year from each of your tax-deferred retirement accounts for the rest of your life.
*MRDs are not required for Roth IRAs. Withdrawals from a Roth IRA will not satisfy your annual MRD requirement.
*Penalties for taking less than your MRD after 70 can be severe up to 50% of the amount not taken.
Can I rollover my employer sponsored plan (example: 401k, 403b, TSA, etc.) to my IRA account?
Yes just use our Rollover IRA Checklist. We recommend that you speak with a qualified tax advisor regarding any tax implications and your new contribution limits.
How do I fund my Individual Retirement Account (IRA)?
You can fund your IRA in any of the following ways:
*Link a Bank Account (Establish ACH)
*Deposit a Check
*Deposit via Wire Transfer
*Transfer a Brokerage Account to The Dedicated Broker
When you deposit funds via Check or Wire, please indicate one of the following deposit reasons:
Contribution with applicable year
OR
Rollover either from an employer sponsored plan or a 60-day rollover from a distribution of an identical IRA account
OR
Fees annual trustee fee ($30)
Can I transfer funds from my individual account at The Dedicated Broker to my IRA?
Yes. You can conveniently transfer money from your Individual account to your IRA account. Please note that you can only transfer cash security transfers are not permitted.
Can I have margin and options privileges for my IRA account?
Margin is not allowed for IRA accounts, but you may request options privileges up to Level 2. Since higher options levels require margin privileges, higher options levels are not possible.

Security Center

Is my account protected?
Yes. The Dedicated Broker and our clearing agent First Southwest Company are members of SIPC, which protects securities customers of its members up to $500,000 (including $100,000 for claims for cash). Our clearing agent has additional independent insurance on your account. An explanatory brochure available upon request or at SIPC. or from First Southwest Company our clearing agent.
Your privacy is paramount to us protecting your information is of great importance. But we also want to provide you with the best products and services we can so that you can accomplish your investing goals. The Dedicated Broker acts as an introducing broker to its clearing firm, First Southwest Company, which processes the transactions and acts as the account custodian. Employees and third-party service providers are only given access to the limited information that they need to perform the given service or task. Additionally, our service providers are contractually obligated to keep the information confidential.
How can I monitor my account?
It is your responsibility to monitor your account and statements regularly and often to verify all transaction activity. Also make sure to check your emails from The Dedicated Broker , If you get a confirmation for something you didn’t do, contact us immediately and change your password. Report any suspicious activity to us immediately by calling us at 855-469-2765 or by emailing us at info@Kenscap.com