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Strategies & Market Trends : Margin Calls - Share The Pain

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To: marcos who wrote (135)	12/12/2000 7:24:16 PM
From: daffodil	Read Replies (1) of 158

Marcos, I'm with you as far as the use of leverage. It hit not only naked put writers but a lot of covered call writers over the head during the April crash, and more of those types of accounts have blown up this month. I've mentioned the covered-call stragegy a couple of times but I still have the feeling that no one is listening. Yes, you can margin your account down to 5% equity (all perfectly legal), if you like, but when the market crashes you will end up with nothing! The one-hour wipeout is no surprise. And so many short sellers were wiped out during the glory days of Amazon and Yahoo! and ebay...the days when the top never came. But those weren't so much instant wipeouts as week after week of agony. Speaking of short sales, who regulates margin in Canada? Is there a central regulatory body akin to our Federal Reserve Board; do the exchanges dictate requirements; do you know? How different are the requirements of various brokerage firms? Is it true that I can open up a Canadian brokerage account and short a $3.00 stock without horrendous margin requirements, as there are here? Do you have any links to share? Now aren't you sorry you came to visit? <ggg> Which brings me back to Y2K. Let's light up the Y2K thread for old times' sake, shall we? Celebrate the "real" millennium? I was thinking about it this week reading about the power shortages in California. If it wouldn't cause so much hardship to so many, I'd love a nice little power outage. <g>

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