Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: scoobypax who wrote (64628)	12/18/2000 2:35:17 PM
From: Bear Down	Read Replies (1) \| Respond to of 122087

it is not considered using margin because you don;t borrow money and you don't pay interest on borrowed stock. For instance. If I sell 100k worth of stock, my account will require 50k available cash.(remember i ain't buying so it is not used to purchase anything, just sort of a gaurantee of ability to repay and i have a credit for the 100k I got from the sale so technically i have 150k in the account and a liability of 100k) Only an additional 35% above market value of the stock owed is required for maintenence. When considering that the profit is immediatly accessible to increase one's position as the liability decreases (stock price falls) returns are potentially much greater. If you mean ROI for a particular sale without considering building a posiition with the profit you would be limited to a 200% ROI however as soon as the stock dropped 27% your complete investment would be "available cash" not necessary to maintain the position so technically you are no longer invested but have the potential of the other 73% of the stock price to erode. Hope that helps