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To: Badger who wrote (89733)	1/18/1999 4:51:00 PM
From: BGR	Respond to of 176387

Badger, Say you have 100 dollars to invest in DELL stock. If you have a margin account, your broker will be willing to lend you money using your stock as collateral, which you may further invest in DELL or any other stock or security (including options), or just spend on a trip (say). Say you take a loan of x dollars and 1) Reinvest in stock. Then your margin equity is at (100/(100+x))*100%. For example, if you take a loan of 100 dollars, you are at 50% equity. For 28% equity, you need to take a loan of approx. 250 dollars. Advantage, say DELL goes up 10%. Your gains will be approximately 35%. Disadvantage, say DELL goes down 10%. Well, you will probably get a margin call and have to sell DELL when it is low incurring a loss of about 40%. I dislike margin very much myself. 2) Reinvest in options or simply spend the money. Then your margin is at (100-x)%. Similar results may be derived. Hope this helps. -Apratim.

To: Badger who wrote (89733)	1/18/1999 6:12:00 PM
From: arthur pritchard	Respond to of 176387

badger:<28% equity??> This means that only 28% of the market value of my holdings at that particular point, are my own cash. The balance, is a margin loan from the broker. What I do is extremely risky, and I do not recommend it to anyone, who finds it in the least bit uncomfortable. I, on the other hand, actually feel most comfortable, when I have just entered a huge margin position. I actually LOVE borrowing huge amounts of money for short periods of time. I especially LOVE it, that I have the following three days after the trade, to pay back the loan, by simply selling stock. I only do this, once, about every two or three weeks. It is going to be very hard for me to stop, because I made it through some very strong price drops last year. But I am studying options. It doesn't seem like any where near the fun. The data are not as easy to look at. I don't even like the way the option quotes are presented. I enjoy looking at the market maker bid/ask action level2, when I'm ready to trade. If I could buy real time charts on options prices, I would be a whole lot more comfortable.