Well, that's the difference between using a stock to create margin and buying the stock with margin. If I have 1 share of BRKa (trading at $70,000 per share) and a 50% margin agreement with my broker, the BRKa will create $35,000 in margin availability. With that, I could buy 70,000 MIDLW at 50 cents per share, even though MIDLW is not marginable. I would then not be able to buy anything else from that margin position, because the MIDLW is not marginable. If, on the other hand, I use the $35,000 in margin availability to buy 500 shares of XON at $70, that marginable position will in turn create another $17,500 in margin availability. Why am I rambling on about this? Anyway, I usually hold all stocks in my margin account beauce it creates more flexibility for me in the long run, whether they specifically are marginable or not.
Enough!
Long and strong on MIDL MIDLP MIDLW!
Oscar |
