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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (76277)	2/20/2000 8:40:00 AM
From: Don Lloyd	Respond to of 132070

Greg - [[[<short against the box> The cash from the short sale is credited to your account, earns interest. The long holding satisfies the margin requirements as price fluctuates, if 50% is given and 50% required. No interest charged in your example.]]] They say that it's not the things that you don't know that get you in trouble, but rather the things that you do know that are wrong. While I appreciate your response, it falls into the latter category. As MB has noted many times, it is an exceptional case where a broker will allow you to earn interest on short sales for other than really substantial account sizes. As far as I can tell, if your total cash position exceeds the short position marked to market, you have the potential to earn money market rates on the difference if your account is so structured. (with the proviso that you do not benefit if the stock falls below the short sale price) If the total cash position becomes less than the marked to market short position, then you will be charged margin interest on the difference at the much higher broker margin rate. In a given month, both money market returns may be earned and margin interest may be charged as the stock prices fluctuate. They are treated completely separately for tax purposes. The above represents my experience with Schwab, other brokers may and almost certainly do vary. Regards, Don