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Non-Tech : MB TRADING

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To: Colin Cody who wrote (2037)	11/20/1998 12:27:00 AM
From: max	Read Replies (1) of 7382

Colin <<This is how a local firm here in Conn. (All-Tech Trading) computes intraday margin.>> Not sure where you're getting your information about Alltech and margin, but it is at least partially incorrect. In your example, your 63K account would give you 126K intraday buying power. As their system doesn't monitor intraday margin requirements during the trading session, it would allow you to take the 3rd 63K lot as you describe, and then present you with a 31.5K margin call the following morning. FWIW, MB's system does not allow you to execute a trade which exceeds your intraday buying power, saving you from what I saw often enough during my 6 months in one of Alltech's trading rooms: -Trader with 50K cash takes a 1000 share long position in a $100 stock -Same trader accidently buys another 1000 shares when he meant to sell -Trader recognizes mistake, and immediately closes 2nd position, but had momentarily exceeded his buying power by 100K -Trader wakes up the next morning to a 50K margin call This example only applies to intraday. As I'm always flat at the end of the day, I can't speak for margin requirements with overnight positions. Max

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