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

To: Jon Tara who wrote (7484)	3/23/1998 6:58:00 AM
From: dumbmoney	Respond to of 16892

Jon, thanks for the well-informed reply. << I don't think that this policy (charging interest on the unrealized loss on a short) is unreasonable. I don't think it's a "raw deal". It compensates your broker for the risk of infinate loss that they have taken on your short position. >> Hmm...okay, but the broker is already quite well protected by the margin requirements. << The reason that you are not paid interest on the credit balance resulting from the short is because your broker has to borrow the stock that you short. This also seems reasonable. (Though, I am sure, in many cases, they borrow it from another Datek customer, and there is no cost to borrow it.) >> I can understand paying LESS than the usual interest rate, but it a bit unfair not be paid any interest. Some full service brokers do pay interest, I'm told. Anyway, Datek seems to be following standard procedure for discount brokers (not counting accounting errors). That's fine.