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To: Arthur Tang who wrote (804)	5/26/1998 7:37:00 AM
From: Arthur Tang	Respond to of 1471

Why $5/share price is such a big hurdle? Those of us who invest in under $5 stocks understand only too well, the hurdle for a stock to go over $5. It is easy if the company is really doing well; and you can expect $10 soon. The $5 hurdle is really the ability for the stock to qualify for margin. If it goes up just above $5, and most of the investors put it on margin; sudden retreat to below $5 will cause unpleasant margin calls, which will pull back the stock more than normal. So, many stocks stop just below $5. It does not mean $7.5/share stock is safe for margin accounts either. If the stock moved nicely to $7.5, pull back of 30% will put the stock in danger of margin calls. If market makers have large short positions; you have to be extremely careful not to gamble on margin.