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Posted On: 10/22/2017 3:26:41 PM
Post# of 82677
Re: riskreward007 #3654
thanks for this detailed information.
one issue that puzzles me, is how in practice it can be worthwhile for anyone to short a low-pennies stock. i heard there was a relatively large margin requirement — so large it would not make sense to tie up so much capital to bet on a stock of a few pennies falling.
i’m glad to hear about the LER — sure wish i’d known about it in 2008!
the downside to a cash account is, (your brokerage will probably not allow you to have both a cash account and a margin account at the same time, but please let me know of any that do!) that in a cash account you have to wait days for the proceeds of the sale of any stock to “clear”, before you can use those funds to buy something else, whereas in a margin account you can buy stock almost immediately after selling stock, with the same funds.
one issue that puzzles me, is how in practice it can be worthwhile for anyone to short a low-pennies stock. i heard there was a relatively large margin requirement — so large it would not make sense to tie up so much capital to bet on a stock of a few pennies falling.
i’m glad to hear about the LER — sure wish i’d known about it in 2008!
the downside to a cash account is, (your brokerage will probably not allow you to have both a cash account and a margin account at the same time, but please let me know of any that do!) that in a cash account you have to wait days for the proceeds of the sale of any stock to “clear”, before you can use those funds to buy something else, whereas in a margin account you can buy stock almost immediately after selling stock, with the same funds.
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