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Gold/Mining/Energy : Zentek Ltd - ZEN
ZEN.V 1.120-1.8%Jan 23 9:30 AM EST
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To: Berry Picker who wrote (4060)10/7/2013 1:30:24 AM
From: hoov2 Recommendations

Recommended By
copperknob
Proud Deplorable

  Read Replies (1) of 22862
 
You've totally missed my point.

The rules for borrowing cash are different from those for borrowing shares.

But, they both have similar rules related to borrowing.

Different brokers have different rules about borrowing shares. In fact, Questrade last week changed its rules about borrowing against ZEN, reducing the percentage margineable from 50% to 15% (resulting in a margin call, without a change in share price).

The collateral against a cash loan can often be as little as 4%, but the collateral against a share loan can be as high as 85% (see above).

The fact is, you can leverage a sale of shares you don't own, and by doing so, take the shares from someone else who otherwise would not have sold. Or, you can just use cash to effect the leverage. The effect is still theft, IMHO.

Lar
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