Wind River going up, up, up! Message Board

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Technology Stocks : Wind River going up, up, up!

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To: dday who wrote (9270)	3/3/2001 11:13:48 AM
From: gingersreisse	of 10309

Good summary of the rules. Agree on the cash account transfer, it's a wonderful way to trigger a short squeeze if enough people do it. One additional point. The broker's risk management department may (should?) also monitor house wide exposure on shorted stocks, to avoid a three way arbitrage. Shares from your account are loaned out. The same co's shares from my account are loaned out, and we're both at margin limit on our own borrowing. In the worst scenario, the unborrowed stocks in my account go down, creating a margin call for me (capital deficiency) while the specific shorted stocks go up, creating a margin call for the borrower. House loses twice over. The usual solution is to limit what % of clients' total inventory in each stock will be loaned, monitor market liquidity, and to put higher volatility shares on the "no loan" list. Schwab has dozens of stocks on that list, plus virtually of the Bulletin Board. GSR

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