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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: michael john stout who wrote (15847)	11/30/1998 8:41:00 AM
From: Oblomov	Respond to of 18691

How much cash you need to short depends on the short margin requirements of your broker. For example, I use Scottsdale Securities, and they have a short margin requirement of 140% of the value of the trade. So, if I wanted to short (using your example) 10000 shares of AMZN at 200, I would need at least ($2 MM) * (1.4) = $2.8 MM in margin to initiate the trade. How much cash this is equivalent to depends on the Fed margin requirements. They are currently 50%, so I would need at least ($2.8 MNM) * (0.5) = $1.4 MM in cash in order to initiate the trade. Of course, once the trade is completed, you need to stay within the maintenance requirements of your broker. I do not recommend that you attempt a leveraged short position, although your broker may allow it. Andrew Aiken