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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Earlie who wrote (241822)5/21/2003 9:38:42 AM
From: Perspective  Read Replies (1) of 436258
 
One of my recent painful realizations was that, in going short stocks, thanks to my US location, I generate US$. And I'm therefore doubling my exposure to that confetti called the Greenback.

Earlie, when you short US stocks, does your broker force you to hold the US$ proceeds, or are you permitted to hold Canadian against the short positions? The law here (I think) forces me to hold dollars against the shorts. Hell, I can't even put collateral like the "risk-free" T-bill against it. Must be cold, hard, raw, (melting) US cash.

For instance, for every $10K in equity I have, if I hold it in cash, I'm long $10K US. Now consider what happens if I short $10K worth of stocks: I end up with $20K US currency and an offsetting $10K stock liability. Holy chit, I'm levering up on the US currency... Anybody figure out how to fix this one easily?

I would look into an account in other countries if I thought I could avoid the double-dollar exposure.

BC
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