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

To: RealMuLan who wrote (7517)	3/24/1998 5:29:00 PM
From: dumbmoney	Respond to of 16892

<< My understanding is that I should get 4% interest on that $20,000. And pay Datek 7% margin interest on that $30,000. >> That would make even less sense than what Datek is actually doing (which also doesn't make sense). No, they apparently charge you 7% on the $30,000. This is the net after subtracting 50,000 from 20,000.

To: RealMuLan who wrote (7517)	3/24/1998 5:34:00 PM
From: Stanley L Brown	Respond to of 16892

Missing Something, I don't think so, but seems you folks are getting close to the reasons trades only cost $9.95 Happy Trading Stan

To: RealMuLan who wrote (7517)	3/24/1998 5:36:00 PM
From: Gorak Shep	Read Replies (1) \| Respond to of 16892

Yiwu Zhang, in your example you are missing something. 1) $20,000 cash + $10,000 long marginable stock. 2) short $50,000 worth of stock. Result: a) long stock is actually irrelevant b) $50,000 proceeds from short sale is irrelevant c) Datek demands $50,000 collateral irrespective of short proceeds; you have $20,000 so you must borrow an additional $30,000 ie $20,000 - $50,000 leaves net -$30,000. d) you pay 7% interest on $30,000 Note that with the same starting conditions, if you short only $10,000 worth of stock, then $20,000 - $10,000 = $10,000 on which you would get 4%.