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Gold/Mining/Energy : International Precious Metals (IPMCF) -- Ignore unavailable to you. Want to Upgrade?

To: John D. McClure who wrote (23849)	10/30/1997 9:37:00 PM
From: Bill Jackson	Respond to of 35569

John, Margin loans are usually secured against other assets, like houses, bonds etc. Ordinary margin is secured against the value of the stock(and in your margin agreements against other assets, read fine print) and often has an arbitrary lower value which the market makers use to start sales cascades when they get yanked to the cash account and you lack cash you are sold and down it goes. Experienced MMs keep a floor just under this margin point and use it to shock stock out of weak holders who lack cash. At this point in IPM any margin buyers should take care that a sudden fall to zero does not imperil their house/farm etc. IE bet half the farm only. If it goes up you make half a fortune, and that is not bad, but if it goes down you lose only half the farm and you live(economically speaking) to fight another day. Bill