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

To: Gorak Shep who wrote (7514)	3/24/1998 5:16:00 PM
From: dumbmoney	Respond to of 16892

<< 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. >> This is a very succinct way of putting it. Thank you. Now the question is why does Datek do this, and why do they not disclose the practice?

To: Gorak Shep who wrote (7514)	3/24/1998 5:21:00 PM
From: RealMuLan	Read Replies (3) \| Respond to of 16892

Gorak:<<There is NO separate Real Cash Balance on which to get 4%. Then I give you an example: I have $20,000 cash and I short $40,000 worth of stocks. Thus, among these $40,000 short position, only $20,000 is from Margin part. You tell me that whether 1) should I get 4% interest on the other $20,000? 2) Or should they charged 7% interest on that whole amount of $40,000 of short proceeding? 3) Or should they only charge 7% interest on those $20,000 on margin and leave my own $20,000 alone, no interest charge nor interest payment? If the second case is true, then Datek really charge me 7% interest on my own cash. This will be ridiculous. As a matter of fact, they really charged me 7% interest on the whole amount of $40,000 in Feb., and now I am disputing with them. I asked several Datek customer representatives, and they told me that I should get 4% interest on that $20,000, but Datek will charge 7% margin interest on the other $20,000. If I understand you correctly, the 3rd case should be true in Datek, right? Please correct me if I am wrong.