Momentum Daytrading - Tricks of the Trade Message Board

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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade

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To: peter michaelson who wrote (733)	3/18/1998 12:55:00 PM
From: dpl	of 2120

>Second, cash comes into the account as a result of the short sale. One would initially believe that interest should be earned on this amount, but it seems not to be the case. I believe that one does not earn interest on cash derived from short sales.< Peter,some firms "do" or "did" pay interest on the credit balance.I know Fidelity did at one time. >Why would one not earn interest? The broker borrows the shares from another account cost-free, I think. The lender of the shares is paying interest on any borrowing he/she undertook to purchase those shares. < If you deal with a big firm they are "borrowing" the shares from another client for free.Read the paper you sign for a margin account. David

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