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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: John J H Kim who wrote (3409)	11/30/1998 7:46:00 PM
From: LastShadow	Read Replies (2) \| Respond to of 43080

Off Topic Leland and Mary Benjamin - start thinking about a time/date for the Michigan SI Traders dinner - Sue Slaine is noodling over her schedule now. Any other Michigan lurkers pm me if you want to join in - Will be in the detroit metro area. lastshadow

To: John J H Kim who wrote (3409)	11/30/1998 7:46:00 PM
From: BarbaraT	Read Replies (2) \| Respond to of 43080

There are new margin requirements on these internet stocks due to their valuations - I am not sure of the exact requirement, but I think it has been moved up to 70% and in some cases, many of these stocks are not marginable (I believe it depends on your individual brokerage account). That means that some people may have margin costs and others, that have been buying large blocks on margin, now have to pay cash. So - instead of anteing up on cash - they sell. The SEC feels this will cut down on the volatility of these low float stocks and, I guess, they are worried about what can happen to the novice investor in the event of a margin call. I know that NDB will not allow me to "daytrade" a stock unless I have a margin account - I have to have the actual cash in the account before I can buy, and I cannot use the funds from a purchase/sale in that same day since they have not cleared. In this case - I could not buy a stock such as OMTK since the funds would not have cleared and it is now not considered a marginable stock. If I already owned it on margin, and my portfolio fell today - I would need 70% to cover it, not the usual 50% and could get a margin call. Because of that, many people sold off these stocks to prevent such from occuring. If they wish to buy, they will either have to buy with a cash position or the particular stock will have to be marginable. I am sure someone else can explain it better than I.