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Non-Tech : Datek Brokerage $9.95 a trade -- Ignore unavailable to you. Want to Upgrade?

To: B.K. Ohneis who wrote (7272)	3/8/1998 4:12:00 PM
From: Gorak Shep	Read Replies (1) \| Respond to of 16892

I also wish I knew how Datek charges margin interest! All I know is that air pressure would be decreased by a rise in elevation. That rise may or may not have any effect. I hope Datek can explain it to us.

To: B.K. Ohneis who wrote (7272)	3/9/1998 10:36:00 AM
From: Jon Tara	Respond to of 16892

"Are you a Datek employee?" Peter is probably rolling on the floor, laughing his ass off after reading that. ;) Have you read the disclosure statement that was mailed to you when you opened your Datek account? It seems pretty clear in paragraph 3 and 4: "3. Debit balances represent money loaned to you by the Firm. When you purchase securities on margin you must pay the amount of money required by regulations of the Federal Reserve Board and the balance of the purchase price is loaned to you. This loaned portion creates the debit balance upon which interest is charged. Each additional purchase adds to your debit balance as do your interest chages and any other charges which may be assessed to your account." "4. Any credit or debit balance in the cash account will be combined with the balance in the margin account for the purpose of computing interest. Only one net entry for interest will appear in the margin account. Interest charges will be made on any extension of credit even if it is not directly related to purchases in your margin account. Examples of such extensions of credit would include but not be limited to prepayments to your for securities sold and late payments received from you on purchases in your cash account." Since I've typed this much already, and there were questions about short sales: "5. ... If the security which you sold short (or sold short against the box) appreciates in the market price over the selling price, interest may be charged on the appreciation in value. If the security which you sold short depreciates in market price, the debit balance is correspondingly reduced by the decrease in value. This practice is knows as "marking-to-the-market". Daily, closing prices are used to determine any appreciation or depreciation of the security sold short." Now, my interpretation of the above is: - The price of your long shares after you have purchased them has no effect on your margin interest, since your long shares are not marked to the market. - There is no margin charged on shares sold short. (See paragraph 5, part that I left out) - However, if shares that you sold short appreciate in value, there IS margin charged on the increase in value. Of course, rather than rely on my interpretation, you should refer to your disclosure statement, and read and interpret it yourself, or have an attorney do so for you.