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

To: peter michaelson who wrote (7506)	3/24/1998 3:34:00 PM
From: dumbmoney	Respond to of 16892

Schwab example: >As mentioned previously, subtract the Short Account value from the Margin Balance to determine if you are earning or paying interest. > >New Credit Margin Balance: $30,000 >- Short Market Value: -$20,000 > ------------- > $10,000 > >Therefore, interest would be earned on $10,000 at a rate of 4% in this example. In the case of my current broker (Waterhouse), you would not earn interest on the $10,000 (because it would be moved from your money market acct to your margin acct). HOWEVER, note that this difference is only relevent if you have a net short position. Normally stock, and not cash, is used for margin.

To: peter michaelson who wrote (7506)	3/24/1998 5:09:00 PM
From: RealMuLan	Respond to of 16892

Peter: First of all, you will have to separate the three $10,000: one is your own real cash and one is the buying power from margin, and just ignore that $10,000 extra proceeding you gained through short position. I think the difference between Datek and Schwab is that Datek charge you 7% interest on that $10,000 of margin power you borrow (the reason I use "margin power" is because in short position, you really just use the buying power of margin, not the margin cash as in long position), and Schwab does not. And they both pay 4% interest on that $10,000 of your own real cash balance. And they both ignore that $10,000 extra proceeding gained from short position. In another word, it is the same thing for Datek whether you borrow the "buying power of margin", or the real cah of margin. They charge you 7% interest on both, period. But for Schwab, they don't charge you the interest for borrowing "buying power of margin" . So for those who hold short position overnight, Schwab's interest is actually lower.