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Non-Tech : Preferred Capital Markets - Attitude Online Trading
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To: peter michaelson who wrote (1)3/26/1998 12:35:00 AM
From: jtsaratoga  Read Replies (1) of 49
 
Peter,

Here is what I got from PCM...

Subject: RE: short margin interest calculation question
Date: Wed, 25 Mar 1998 16:19:02 -0800
From: Recia Merrill

Thank you for your inquiry. Here are the answers to your questions in numerical order :

1 & 2) No. Cash balances that are being held to maintain a margin (short) position will not earn interest. However, interest is paid on short market values over $50,000. Please refer to our web-site at www.preftech.com for information on the Short Stock Rebate.

3) None. Margin interest is only charged on a margin debit balance. The rate is currently an annual 8% accrued daily.

4) A maintenance call will be issued if the price of the stock rises above 115 3/8. At this point the equity in the account falls below our 30% minimum maintenance requirement.

I hope this information will be helpful. Please e-mail with any further inquiries.

Thanks,

Mike Curley
Internet Support
Preferred Capital Markets, Inc.

-----Original Message-----
To: at@preftech.com
Subject: short margin interest calculation question

I'd appreciate if you let me know how the short margin interest is
calculated. For example, one has 10,000 cash in the account, he shorts 200 shares of a stock XYZ at $100 on 3/25. On 3/31, he covers the short at $95. My questions are:

1. Does he earn interest on his $10,000 cash balance during this period?

2. Does he earn interest on the short proceeds $20,000 during this period?
3. How much margin interest is charged to him? How do you calculate it?

4. At what price point the margin call will be triggered?
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