this really hurts when i go into margin every night and have to pay for it.
We're not paying any additional margin interest as a result of this. Look at it this way: suppose you start with $10,000 in cash and borrow $8,000 from Datek to buy securities. You buy 10,000 shares of something at $1.80 per share. So you have a total account value of $18,000, with an $8,000 loan and $10,000 in account equity.
Now Datek comes along with their bogus closing prices and values your security at $1.60 per share (for example). Now they will say you have a total account value of $16,000. You still have an $8,000 loan, so they will show you $8,000 in equity.
Now try a value of $1.20 per share ... total account value $12,000; loan value $8,000; $4,000 in equity.
No matter how they value the stock, the loan balance stays at $8,000. You have to pay interest on $8,000 cash and you have to pay back $8,000 cash. You should not pay any more or less interest whether they value your stock at $1.80 per share, $1.60, $1.20, or even $0.00.
The hurtful part is that your MARGIN PERCENTAGE will change so that you can get a bogus margin call if they undervalue your stock too much. Also it bugs me to see my account value lose touch with reality like this.
Given the problems Datek has had with record-keeping, I think it would be wise to make independent calculations of one's margin interest and see if it's correct.
Please do e-mail Datek about it. When they get enough customer complaints about it, they will do something about it. |
