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Strategies & Market Trends : Pump's daily trading recs, emphasis on short selling -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (3486)	7/8/2001 10:22:14 AM
From: Aduke	Respond to of 6873

Hi Chris, Sooo if you want to short 10000 shares of CRAP.OB trading at .50, you have to put up $15,000. So you even if the stock price drops 50%, you've only made 16% on the money you've tied up. ... but if you always have a huge pile of cash sitting there in your margin account anyway ... You are right, OTC BB stock shorting is not for the average small investor. It takes a lot of cash and guts. Take care, Aduke

To: ChrisJP who wrote (3486)	7/8/2001 12:04:47 PM
From: Jim Bishop	Respond to of 6873

Chris, here's what I actually said below. LOL someone in LIVE on Friday asked if MVEE could be shorted...my reply was something like: well if Global let you, using the 100% plus .50 a share, to short MVEE 1 million shares at .006 you would need the initial 600 bucks in your account.......plus $500,000.00, and what is your maximum possible gain on that short? Six hundred bucks. Also Canadians who are not classed as traders by CCRA should note that all shorts are treated as income (gain or loss) and cannot be used as capital gains, or losses. To:SSP who wrote (87505) From: Jim Bishop Friday, Jun 29, 2001 1:23 PM Respond to of 87747 Here's the deal with Global Securities and shorting BB's. Margin required for over .50 BB's 200% Margin required for under .50 BB's 100% PLUS .50 (FIFTY CENTS) PER SHARE!

To: ChrisJP who wrote (3486)	7/8/2001 5:43:06 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 6873

Sorry for not delivering answers in first place. But here are some additional points re margin use: $2.50 is the minimum margin requirement for short sales for low priced stocks. (< $2.50). See: (IB): Initial margin requirements: For a short sale of stock the greater of: 50% of the sale price; or the short sale maintenance margin requirement (see below): Maintenance margin requirements: To prevent an automatic liquidation, the account must meet minimum maintenance requirements. For short stock sales: 30% for underlying stock priced $17.00 per share or more; or $5.00 per share for stock priced between $5.00 and $16 7/8 per share; or The greater of 100% or $2.50 per share for stock priced less than $5.00 per share; $2,000 minimum account equity for all margin transactions (Datek): Maintenance Requirements: For short positions priced at $5.00 or higher the margin requirement is 30% of the current market value, or $5.00 per share, whichever is greater. If the stock has a special maintenance requirement (such as 50%) use that figure instead of 30%. For short positions priced under $5.00 the margin requirement is 100% of the current market value, or $2.50 per share, whichever is greater. -------------------------------- The logic behind short sales of non-marginable securities is unclear. For example, Datek never allowed to open a new short in stocks < $5, but it appears that this is the exception amongst most brokers. In general marginability of stocks is not necessary for short selling. If a stock is marginable then this only means that it is good to have a part of the purchase price credited against the ownership of the stock. Short sales are a different thing. Your own creditworthiness decides over the ability to enter and sustain a short position, not the quality of the company whose stock is being shorted.