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Strategies & Market Trends : Margin Calls - Share The Pain -- Ignore unavailable to you. Want to Upgrade?

To: swisstrader who wrote (9)	11/30/2000 4:59:24 PM
From: George the Greek	Read Replies (2) \| Respond to of 158

Daffodil, Thanks for a better explanation of SMA than I ever received. It's always been a confusing topic. -George

To: swisstrader who wrote (9)	11/30/2000 6:56:29 PM
From: Dan Spillane	Read Replies (3) \| Respond to of 158

Seattle-ites have been feeling pain. The news here in Seattle was that some people's houses and cars were in trouble due to margin calls. If you haven't got a margin call in the long fall since April and have been using it heavily, I would be surprised. Here in Seattle, there has been steady news of margin calls for some time. Microsoft employees can borrow against stock options which aren't yet realized. Apparently some people leveraged houses and cars with this--this was in the news just a few weeks ago. So many stocks are trading at rock-bottom prices, there could actually be a leveling out of margin calls now, so long as an account is diversified. Many stocks are "dead", trading at some ratio to book value, essentially a flat line for some time. And I think the Nasdaq has felt some serious margin selling pressure which may explain the low valuations which are as insane in many cases. Let's face it, there are many value stocks on the Nasdaq trading at multi-year lows where the risk profile is not high. I know of some stocks which are trading below cash value. Margin selling might explain this.

To: swisstrader who wrote (9)	11/30/2000 9:19:49 PM
From: daffodil	Respond to of 158

swisstrader, I couldn't agree more. The regulators have taken several steps to try to get this point across to investors, especially in this joint statement from the NASD and NYSE: nyse.com as well as in the links I posted earlier. Margin magnifies gains, but also losses. Even more important, margin can be so complex that investors may not understand it themselves and may be given the wrong information by telephone service representatives. Try calling an online firm with a short straddle idea and asking the telephone rep what the requirements are. Does anyone want to estimate the probability of getting a correct answer?