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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (508)6/11/1999 7:02:00 PM
From: Paul Viapiano  Read Replies (2) | Respond to of 18137
 
Can someone explain margin maint requirements in English to me. I don't use margin but I was reading some info today on Datek and couldn't make heads or tails out of it.

Say somebody has $100K in account equity and goes on margin for $50K, so now their long stock value is $150K and account equity is still $100K.

Now the margined stock dips 50% and is now worth $25K but the account equity is still $100K. Is there a margin call? When does the margin call come?

Thanks, Paul



To: Lazarus_Long who wrote (508)6/11/1999 7:51:00 PM
From: -  Read Replies (1) | Respond to of 18137
 
<you gotta scare em' into giving you their stocks cheap...>

I completely agree with the sentiment. It's the strangest business in the world... there is no accountability. They even seem to believe all the B.S. themselves.

Witness, e.g. the talk that internet stocks are very vulnerable to higher interest rates, "because they must borrow so much". What a load of malarky! It's the companies that carry real debt, or in the financial area, or that appeal to the more conservative investors that are more sensitive to that... or that investors would pull their money out of, and over into Bonds with higher rates. There are hundreds of other examples.

That's why I like turning off CNBC, and just trusting my charts. I just watch out for major pending events/reports on the web... -Steve



To: Lazarus_Long who wrote (508)6/11/1999 8:19:00 PM
From: TraderAlan  Respond to of 18137
 
James,

The myopia is just amazing. Of course, we all get sucked in at times. Last October, I saw two sources I trusted say the bottom was in the day CSCO, DELL, etc were dropping off the cliff. Then I saw the same thing in the charts that night but refused to believe it.

Completely missed the early big gains waiting for the "other shoe to drop".

Alan


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