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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Sword who wrote (4934)	3/29/2002 11:20:29 PM
From: KFE	Read Replies (2) \| Respond to of 4969

Sword, There was no confusion in my reply at all. If you took the time to follow the few posts on the subject you would see that the questions were 1. Can a stock under $5 be shorted if it is not marginable. 2. Is there any price limit below which a stock is not marginable. This was your reply to my post But as to the a requirement that the stock be marginable in order to be shorted, that is nonsense. That is exactly what I said in my post so I don't know what your argument is. Here is the post This does not mean that a security below $5 cannot be shorted because not being marginable does not mean that it cannot be shorted. The problem is borrowing the security. If it can be borrowed it can be shorted. As far as if there is a price at which a stock is not marginable by regulation my post is accurate but I will grant you that if could have been more comprehensive by mentioning the $2 limit for continued inclusion. I was just trying to make the point that there is a regulated limit and posted the link to the source so the poster and original questioner could read and understand all the margin credit rules including the $2 limit. This was the post to which I was responding so to correct the posters erroneous statement. Question: That $5.00 marginable level is set by your broker only. So there are no min. price level limitations based on SEC rules? Answer: Correct. Whether you want to use the $5 or $2 limit this is not a correct statement. Since you mentioned options and margin here is something of interest which I had the misfortune to find out recently regarding "pattern day traders" and options. You could have a $20,000 free credit balance and six figures in long options less than 9 months to expiration and you will receive a margin call for $5,000 to bring you up to the $25,000 minimum. Regards, Ken