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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (61286)	9/21/2008 7:25:17 PM
From: Proud Deplorable	Read Replies (1) \| Respond to of 78440

There is a big difference. When you charge it on your visa is it is your stock and if you default its your problem. In the eyes of the broker they don't care where you got the money, they consider it paid for and thus cannot be shorted against. When you have a margin acct and buy shares on margin you don't own them and the broker can do whatever they want with them until it moves into your cash acct or whatever. With a margin account it doesn't matter if you purchased stocks on margin for them to be lent out. As long as you have a margin account as opposed to a cash account, those shares are available for the broker to lend, no matter how much excess cash you have in the account. If you do not want your brokerage to lend out your shares, you have to open a cash account. ============== Another interesting view: "http://agoracom.com/ir/Aurelian/messages/947686#message" "The capital markets were designed in order that companies could raise money in order to grow there business without the need to borrow from a lender and be charged interest. They are very efficient when price discovery is left to those market participants who actually own the shares they are trading. Shorting is not the flip side of buying shares on margin( borrowing the money). Buying on margin entails putting up collateral to buy shares that have been legitimately issued by a company with approval of shareholders. Shorting entails putting up collateral in order for the privilege to counterfeit shares issued by brokerages without the companies or their shareholders permission. In case readers missed it , to allow a brokerage to dilute at will the number of outstanding shares of a company by selling short without shareholder permission is counterfeiting and should be illegal. In our almost non existent enforced regulatory environment, when individuals are allowed to indiscriminately dilute the number of outstanding shares of a company. This will lead to any companies share price collapsing, it is a simple matter of supply and demand. An infinite supply will always overpower a limited demand. To suggest that shorters provide the markets with some sort of stability is naive at best, or brought up by someone who's interest remains in keeping the manipulated markets exactly as they are for their own personal benefit. Shorting was brought into effect by the MM, not to bring stability to the markets but instead to bring instability when they so chose to do so hahahahahah. This was for the reason, so that they could swing trade securities without having to first actually purchase it. Not much of a trade if the selling you do is offset by your previous buying. It is much easier to create fear in the markets than euphoria, especially when you can counterfeit shares. By slowly feeding shorts into the market and then when buying has dried up massively shorting you can collapse a share price creating fear and margin calls. Where you then replace those shares at a substantial profit. This volatility would never happen if only those legitimate shareholders were allowed to unwind their positions themselves through legitimate price discovery. Shorting has the effect of collapsing a stock below its true value, such as in the case of ARU or many other junior explorers that stock are selling for below actual cash on hand. To suggest giving a bunch of manipulators (to put it nicely) the power to regulate the supposedly free markets by allowing them to short(counterfeit) shares is one of the most laughable things I have ever heard hahahahaha. Might as well give the keys of a prison to the prisoners and entrust that they will self regulated themselves, releasing themselves when their time is served hahahahahaha. Caveat emptor (buyer beware), if a person through inexperience buys a security that has raised to unrealistic expectations then that was his own doing. If he loses money or is wiped out, the share price, through price discover of those who actually own the legitimately issued shares comes down to reflect a more realist price then that is an efficient and fair market. This is because this person will have learned a valuable lesson or not be able to participate in the markets for a long time. This process is much more gradual without shorting involved and thus allows those investors who bought high to more orderly exit their positions if they so chose to. There is no need for a bunch of manipulators, who in many cases are the same entities who drove the share price up to unrealistic prices, then suddenly collapsing the share price to doubly profit. This is the real reason shorting was introduced into the markets. Eliminating margin accounts will not stop markets from being overbought, all it would stop is the amount of money involved being smaller. This of course is not in the interest of the manipulators either. However to suggest not allowing margin is to suggest not allowing borrowing for any purpose, whether to buy a car, house or whatever. You do not need to take margin from a brokerage in order to borrow in order to buy stock. You can borrow from a bank but in either case cash has been paid for any security bought on margin. Margin or loans should only be given to those people through good lending practices who actually have the collateral to repay the loan. If these practices are not followed than those institutions should suffer the consequences of their actions and not be bailed out, but prosecuted harshly. It seems shorting is being put on hold or contemplated in more places than just Britain now, just as I predicted. Regards, F.F."