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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?


To: donald sew who wrote (51698)9/7/1998 8:54:00 AM
From: donald sew  Read Replies (3) | Respond to of 58727
 
Lisa or anyone,

My broker told me something that caught my interest, but I really do not have the experience to validate such.

He indicated that with the 500 point drop in the DOW last Monday, there was a sizable increase in margin calls that were initiated. He also indicated that there is a time from of about 5 business days to handle the margin calls, which if he is correct will be TUE. So he feels that there will be selling on TUE to make good on the margin call, and if the market is up on TUE it would help, but may not eliminate the margin calls.

My question will margin calls really make that much of difference to have an effect on the direction of the market, or will the effects just be limited in that it wont help the market but would not that important to be a small trigger to push the market down or stall an upswing.

Inquiring minds wants to know.

Seeya