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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Richard Estes who wrote (9011)	12/27/1998 2:50:00 AM
From: FR1	Read Replies (2) \| Respond to of 12039

BTW: explain the 30% margin, The actual fed rules, as I understand them are: 1) You can borrow 50% of your liquid assets when you make the purchase of stock on margin. That means if you purchase $50K in stock on margin, you have to have a portfolio worth $100K. Brokerage "House Rules" are allowed to overrule this for risky stocks. 2) The stocks you purchased may drift lower but there is a "bottom" at which brokerage houses are forced to sell your stock whether they like it or not. That figure is 30%. If the liquid value of your account falls below 30% of the value of the securities in you account, you are forced to sell off stock and bring it back up to that value. Fed rule. Beyond that, all brokerage houses are free to establish their own "house" rules on margin accounts.