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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 385.42

-0.3%

4:00 PM EST

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To: Tommaso who wrote (12153)	2/23/2008 6:08:57 PM
From: The Vet	Read Replies (2) of 29622

Tommaso, there is no doubt that retail shorts and small players cannot play footloose and fancy free with the money from a short sale, but did you consider what your broker did with it. He collected the cash from your sale and maintained the entry in your account. You may have been prevented from drawing that cash and forced into maintaining margin to cover the short, but the cash and the excess margin was available to your broker all the time to improve his bottom line. The large players, banks, brokers big funds trading for their own accounts etc. all use the cash paid to them by longs for the stock they sell short. They have to account for it indirectly but that's all. As I said in my original post; for the shorts, this is money in the bank, and in fact they probably are the banks (we all know they need liquidity and there are few better ways to get it). Sure they show a liability on the books for the stock sold but not owned or delivered but there is a equivalent amount of free cash on the other side of the ledger. That's way better than most of the rest of their over-leveraged deals.

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