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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Carl Yee who wrote (1344)	7/3/1998 7:11:00 PM
From: Kurt N	Read Replies (2) \| Respond to of 2506

If a stock if above $5 and I short it, I can short it using margin (ie. put up 50%) If a stock is below $5 and I short it in a cash account as long as I put up 100% of the $$ amount of the short. What happens if I short a stock that is marginable (and use margin) when it is above $5, and the price goes below $5 (and is no longer marginable)??? Is this what would happen??? Short 100 shares at $10 -- $500 cash, $500 margin. Price goes down to $4.75, must have $475 in cash, you've got $500. Life is cool) Short 100 shares at $6 -- $300 cash, $300 margin. Price goes down to $4.75, must have $475 in cash, you've got $300. Up oh, you need $175 more in cash?????? Life not so cool. Either you need additional cash OR cover. Kurt