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Strategies & Market Trends : Margin Calls - Share The Pain
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To: Robert O who wrote (150)1/14/2001 10:13:28 PM
From: daffodil  Read Replies (1) of 158
 
Hi, RO. You probably saw Mama Bear's reply to the question of interest on short sales:

Message 14986895

I too find it surprising that firms would charge interest on the amount of the short sale. The reason that you have to leave your proceeds at the firm, and the reason for the mark to the market, is that the interest earned on those monies compensates the lender of the securities for the loan. Charging you interest on the proceeds amounts to a "short sale service fee," but apparently many online firms are doing it.

At any firm you're considering using for shorting, I'd keep asking the question until you find someone who really understands how margin is calculated on short sales. They should be able to provide it to you in writing, to fulfill their "truth in lending" requirements.

I'd be interested in hearing what you find out about specific firms. Good luck!
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