Elective locks
Elective locks prevent your account from selling a holding for any reason. A common example of this is a client who wants to keep an investment for sentimental reasons.
Whereas gain locks only prevent selling a holding in a non-qualified account when it has an unrealized gain, elective locks expand that notion to not selling a holding in any type of account, for any reason.
| Elective locks | Gain locks | |
|---|---|---|
| Prevents selling specific holdings: | ||
| With an unrealized gain | ✅ | ✅ |
| With an unrealized loss | ✅ | ❌ |
| In a non-qualified account | ✅ | ✅ |
| In a qualified account | ✅ | ❌ |
Common questions:
Q: Can I use elective locks to hold individual equities?
A: Yes.
Q: Can I use elective locks to keep a holding even if it is at a loss?
A: Yes.
Q: What happens if both an elective lock and a gain lock are turned on for a particular fund?
A: As long as a position has an elective lock, it will not be sold.