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Technology Stocks : America On-Line (AOL)

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To: Tom Tallant who wrote (19119)5/28/1999 11:32:00 AM
From: GalSal  Read Replies (2) of 41369
 
Tom, don't you think there is a snowball situation with margins? When stocks drop a lot and traders get margin calls and they don't or can't put in more cash, they have to sell some stock at any price to cover margin call which in turn pushes stock down more triggering another margin call and so on? Also as regards AOL, when firms raised margin to 60% or 70% from 35% and investors didn't sell at that point, it may have put them very close to the redline on margin. Opinion?
--Sally
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