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

To: Louis Riley who wrote (64686)	12/19/2000 8:49:08 AM
From: Louis Riley	Read Replies (1) \| Respond to of 122087

Some caveats to my previous example: the 50% initial margin requirement as required by Reg T is just that: an initial margin requirement. Maintenance margins requirements on a short sale vary by firm ("house" requirement), but I believe may currently not be less than 30% per Reg T. So your invested capital may actually drop to as little as 30% the day after you put the position on once the excess margin is released. Also, as a short sale is marked to the market in your favor, your maintenance margin required falls. So it is certainly possible to make more than 200% on a single position if you are able to take advantage of the two situations described above and therefore increase your leverage. But the basic calculation I laid out in the previous post should hold true for most conservative short sellers.