If you hold a security in your Firstrade account that no longer has a ready market or an independent transfer agent, you may be able to remove it from your account through a penny-for-lot transaction. This article explains what that means, when it applies, and how to submit a request.
What is a penny-for-lot transaction?
Firstrade Securities Inc. (“Firstrade”) is unable to locate a ready market or an independent transfer agent employed by certain companies to conduct a stock transfer. When there is no market or transfer agent for these securities, you may assign them to the Firstrade “worthless securities account” for tax purposes.
Firstrade will sell the security from your account for one penny for the lot. The security will then be removed from your account. You will have no further claim to the securities, and Firstrade makes no claims or predictions concerning the future value of the security.
Before you submit a request
Please check with your tax advisor to confirm that this course of action will produce no unintended results on your tax return.
What you’ll need to provide
On the Penny-for-Lot Request Form, located in our Forms Center, list each position you’d like to assign to the worthless securities account. For each one, you’ll need:
Number of Shares
Security Description
Symbol / CUSIP
You’ll also need your account number and the shareholder name(s) and signature(s) of all account holders (including any joint shareholders).
What you are agreeing to
By signing the Penny-for-Lot Request Form, you (the undersigned):
Agree to sell the listed securities to Firstrade, and request that Firstrade purchase all shares for a purchase price of one penny ($0.01) per security (penny-for-the-lot).
Represent that you are the owner of the securities described, in the amounts stated.
Agree to hold Firstrade harmless from and against any and all claims, demands, causes of action, obligations, and liabilities of any kind which arise out of, or are in any manner whatsoever connected with or related to this sale.
How to submit the form
Download and complete the Penny-for-Lot Request Form from our Forms Center, then return it to Firstrade following the submission instructions provided with the form.
Questions?
If you’re not sure whether a security in your account is eligible for a penny-for-lot transaction, or you have questions about the form, please contact Firstrade Customer Service.