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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (37008)	1/26/1999 10:30:00 PM
From: Bob Duncan	Read Replies (1) \| Respond to of 164684

Can someone explain to me the margin requirements for a boxed position? Let me give you the situation: I shorted 100 shares of AMZN, then went long 200 with Etrade. (Thus, a net long of 100.) Later in the day I shorted 200 more shares for a net short of 100. Then, near the close I bought 200 shares for a net long of 100. Thus, my account looks like this: Short AMZN: 300 shares Long AMZN: 400 shares Now, Etrade would let me sell 400 shares tomorrow even though because I own other positions in stocks I would not have the margin buying power to short 300 shares of AMZN outright. Should Etrades computer allow this? Because of my margin buying power I should only be able to mantain a long or a short of 100 shares of AMZN. (Again, because much is tied up in other stocks.) I know I could sell the 300 with trouble tomorrow as I did a similar set up yesterday with AMTD. I just want to make sure I don't get a margin call, if anyone can let me know I would appreciate it. Also, Etrade would also let me buy to cover 300 shares for a net long position in AMZN of 400, which would also be a position which could not have been established originally. It just seems dangerous for a broker to allow this because in theory I could build up a huge leveraged position with a stock by rotating going short and long and then dumping the long side or buying to cover the short side. I did this yesterday with AMTD just to see if it would work and it did, although I quickly bought to cover (It let me go long 2000 shares after I dumped to short position of 1600 in AMTD.) Any help would be outstanding.