Amazon.com, Inc. (AMZN) Message Board

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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 231.11

-3.3%

3:59 PM EST

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To: HG who wrote (90023)	1/7/2000 12:24:00 AM
From: Tradegod	Read Replies (1) of 164684

>>Margin call is issued when the net account balance is 35% (not 50%) or less then the value of equities held in that account......thus an equity has to fall by 65% before a margin call is issued.... Not quite: Example You buy a $100 stock on Margin for 50 bucks. You're already at 50%. If the stock drops 25 points or 25%, then your equity is 25 bucks on a 75 dollar stock. Your at 33.3% equity and you get a margin call for $1.67. You then add equity or sell stock to get you back to 35%. The sad thing is your now stuck. You can't buy any more stock or trade your way out of your situation without pumping more cash into your account. You can only hope that it goes back up. You then have to have a 50% rise in the stock just to get back even. If the stock continues downward the margin calls continue daily. It's not fun for the customer or brokerage firm when those times are occurring.

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