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Pastimes : Asensio** King of the Shorts - LET'S RUMBLE! -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (232)	2/10/1999 10:35:00 AM
From: Karnak	Respond to of 257

With regard to the need for a margin account: 1. A short sale is not an asset, it is a liability. Therefore it cannot "reside" in a cash account. 2. Selling short involves risks over and above those encountered in a cash account, for example, the risk of a margin call. Your margin account involves a loan agreement with your broker which sets forth the parameters under which they will accommodate your short sale, as well as protecting their interests if you are unable to meet a margin call. 3. One post asked about having funds flow between a cash account and a margin account on an as-needed basis. That is actually exactly how a margin account works. The account has both a cash and a margin "side", so it is unnecessary to have 2 accounts. Hope this helps.