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

To: RealMuLan who wrote (7509)	3/24/1998 4:50:00 PM
From: Gorak Shep	Read Replies (2) \| Respond to of 16892

Yiwu Zhang, you just don't get it. There is NO separate Real Cash Balance on which to get 4%. First, forget the proceeds from the short sale. They have NO IMPACT WHATSOEVER on your account even though Datek messes with your mind by noting them there. Second, Datek marks-to-market at the close of each day the value of the short position and deducts that from your Real Cash Balance. If this number is positive, you get 4% interest on it. If it is negative, you pay 7% interest on it (all interests annualized). There is not one amount on which you pay interest and another on which you ought to get interest. Amounts are netted together and you receive or pay interest depending on whether the net is positive or negative. In effect, Datek acts as if borrowing the stock is just like borrowing the equivalent amount of money and then modifying your account balance accordingly. Of course the true difference is that in the case of money, Datek has to pay its customers 4% on this money. But when borrowing shares, they pay nothing to the customer loaning the shares. Plus, Datek benefits by having access to the proceeds of the short sale for free. Yes, Datek wins big from short sellers.