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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: tom r. phillips who wrote (32786)	9/24/1998 6:47:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Tom, When you sell a stock short, whether a Web or a CEF or IBM, somebody pays cash for it. Your broker holds that cash as a guarantee that you will buy back the shares some day. They earn interest on that cash. Of course, you are taking all the risk. Now, if you are The Bass Brothers or Soros, you walk in to Merrill Lynch and you say, I want the interest. They can't give it all to them, as there is often a tiny fee to borrow the shares. But the big guys get 95 to 99 pct. of the interest that cash generates. If you are not a big guy, the brokerage firm steals all the interest that should be coming to you. Some will give a good client a rebate of 70-85 pct. on short sales of liquid issues. On CEFs, you are lucky to get 25-50 pct., as they are harder to borrow and keep borrowed. Without a rebate, I do not recommend that anyone sell short. Even worse, some brokerage firms are so crooked that they CHARGE you interest on the short sale. Those brokerage firms should not only be fired, but fire-bombed. -g- I am not really an anarchist. But I hate their slimy guts when they do that sort of thing. MB