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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Zeev Hed who wrote (14505)9/11/1999 1:14:00 PM
From: Harold Hertzfeld  Read Replies (1) of 27311
 
"When one sells short, one gets paid".

Selling short releases no funds at the time of the short
sale. Only if the stock moves down after shorting is there
a release of funds to the account. And, if the short
goes against the investor, i.e. if the stock goes up after shorting it can sop up a lot of cash from the account as the short position is marked to the market every day. So if
a short sale was profitable and then went the other way there would be a recapture of those released funds by the
brokerage firm ...and then there would be further calls for more funds or
security as the stock continued to climb. And as there is no ceiling on the price of any stock there is no limit as to
how much an investor can lose by shorting. Without a discipline one could lose his house.

Harold
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