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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (20572)	2/11/1998 9:04:00 PM
From: margin_man	Read Replies (2) \| Respond to of 36349

<<Once the account equity rises above 50%, option buying power will rise dollar for dollar with share price. >> porc, This is unnecessary true. Take the following example: Total portfolio: 100,000 Equity: 50000 --> Margin: 50000. So this is 50% equity. Say the stock goes up, and your equity goes up another 50000. And the account will look like this: portfolio value: up 150000 equity: up 100000 ----> Margin: still 50000 So you were saying that I can have another 50K for option buying power? I don't think so. Why? O.K. Say you bought 50K worth of options. Here's how the account will look like after the buy: portfolio value: still 150000 equity: down to 50000 ----> Margin: up to 100000. This results in a 33% equity. Margin call? Are my calculations correct? Patriot