Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: poodle who wrote (9582)	6/3/1998 12:13:00 AM
From: dumbmoney	Read Replies (1) of 18691

All brokers I know (not too many) have this rule. Question really was: why? I would appreciate any information about regulation(s) this rule is based on. As far as I know there is no absolute regulation against it. Schwab lets you short under $5, but may require more than the usual 50% margin. Datek lets you short listed stocks under $5, but not Nasdaq. As for why, it surely has something to do with the usual rule that stocks must be >$5 to be marginable. From a symmetry point of view, it makes a little sense that the rule should apply equally to longs and shorts. However, the shorting should be allowed if the customer is willing to put up additional margin; I suspect they just don't want the accounting hassle.

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