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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade
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To: Spots who wrote (737)3/18/1998 2:00:00 PM
From: RealMuLan  Read Replies (1) of 2120
 
Spots:<<Most brokers also mark your short position to market daily
and charge you margin interest on the difference if it's value
falls below the cash generated by the short. This is loads of fun
and profit. For the broker.

Could you please give me an example for this? I am very confused. Say I short $50k worth of stocks, $20k of proceeding is my own money (that is to say, I have $20k cash balance if I don't short), and $30k proceeding is on margin. What Datek did is that they charge 7% interest on $30k proceeding, and haven't pay me the 4% interest on my own money. I don't think this is right. Could you explain it to me?

Thanks a lot.
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