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

To: dumbmoney who wrote (7494)	3/24/1998 10:50:00 AM
From: Jon Tara	Read Replies (2) \| Respond to of 16892

"Why do you deduct 100% when only 50% is required for margin?" They deduct 100% of the PROCEEDS of the short sale. You can't use the PROCEEDS, since that money isn't really yours - it resulted from selling shares that you borrowed. So, they deduct it. Further, you are required (by Federal law - don't bitch at Datek!) to put up 50% of the value of the short sale as collateral against any adverse move in the stock. So, they then deduct THAT. The net effect is that you need $5000 cash (or $10000 in marginable securities) to short $10000 in stock.