Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: Rocketman who wrote (5155)	6/18/1998 7:29:00 PM
From: Andreas Helke	Respond to of 9719

A broker will only let you sell short if there is buying power available that is equivalent to the amount that you want to short. IMHO that does not make sense. I consider a portfolio that is a mix of short and long positions to be less risky than one that is exclusively one way. But that are the rules that the brokerage industry is using. If the short goes the wrong way it will tie up more buying power. If the price is actually going down then the initially tied up buying power gets available again. Andreas

To: Rocketman who wrote (5155)	6/18/1998 8:09:00 PM
From: Russian Bear	Read Replies (1) \| Respond to of 9719

Rman, Andreas is correct 100%. You need $10,000 in buying power to short $10,000 worth of any stock. The credit is made to a special account that is associated with, but separate from, your regular margin account. Each subsequent day, your short position is "marked to the market," thereby either liberating additional buying power, or if you are less fortunate, consuming additional buying power. By the way, some brokerages (very few, unfortunately) will allow the credit balance in the "special" account to accrue interest. Aufhauser was such a brokerage, before it was folded into Ameritrade. I know of no particular others with such a liberal policy, although I remember reading somewhere that they do exist. At the majority of brokerage houses, the credit balance accrues interest only for the broker, unless the client is sufficiently powerful to negotiate a better deal (read: institutional investor.) Regards, RB P.S. IMO, Entremed is a no-brainer short, particularly after today's 7 point surge (options-expiration games?) Good luck.