Shorting with Offshore Accounts Message Board

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Non-Tech : Shorting with Offshore Accounts

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To: Daniel Chisholm who wrote (46)	2/17/1999 10:35:00 AM
From: peter michaelson	Read Replies (2) of 127

Daniel: Shorting is very profitable for the broker because of the interest. It works like this. They borrow the stock for no cost from someone else' margin account per the margin account agreement. They lend it to you, but you have to have sufficient margin available to borrow it, similar to the amount required to buy the stock. Interest is not paid to you on the amount of margin required for your 'borrow', yet the money is still there. The broker keeps the interest earned on that money, until you return the stock you borrowed. Amounts to a free loan to the broker, who earns interest on the loan. Net interest income is often a greater source of revenue to a broker than commissions. Take a look at a broker's financial statements to verify. Peter P.S. Are you the person living in New Brunswick?

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