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Gold/Mining/Energy : Gold and Silver junrs- portfolio

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To: tyc:> who wrote (230)	5/4/2008 3:29:35 PM
From: tyc:>	Read Replies (1) of 328

Let me amend that last posting; (would someone correct me if I am wrong ?) I set up the "pairs" in an imaginary portfolio with significant available margin including US$20,000 of free cash. "pairs" shows current cash of $20,074, but $5,779 of it (the current value of the shorts) is required to be held in the short account, so free cash is US$14,295. Only if free cash is eliminated will we need to borrow funds and thereby incur an interest charge.... (currently ~ 7% p.a., i think) What has "pairs" done to the available margin of the portfolio ? Assuming that all the pairs' stocks qualify for 70% margin, available margin will be reduced by 30%*(value of long + value of short). At the moment then pairs has reduced available margin by $11,528. We will call this the "margin cost" We will monitor that margin cost and hold it to a maximum of $50,000.

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