GO
Help
All content in the ZeccoShare community is generated by its members and does not contain advice or recommendations on behalf of Zecco Holdings or Zecco Trading. More>>
Content Name: CommunityDisclaimerShortLeftNav
Preview Revision #:
Active Revision #:
Edit Content
Zecco.com » General Investing » Margin Trading » Shorting Stocks ....
Last post 04-10-2008, 3:10 PM by PennyPlayer. 5 replies.
Previous   Next
Content Name: ForumThreadInternal
Preview Revision #:
Active Revision #:
Edit Content

  •  02-24-2008, 5:15 PM 24072

    Shorting Stocks ....

    Reply Quote

    I have never shorted stocks....

    How much of stock i can short, is it related to my account balance ? or how is it calculated ?

    When i short the stocks, the money of selling them, is it credited to my account ? and if so, can i use it to buy something else, until i decide to cover my position ? and is there a time frame to have to cover my positions ?

     

    The Engineer.

  •  02-24-2008, 6:29 PM 24074 in reply to 24072

    Re: Shorting Stocks ....

    Reply Quote

    The proceeds of a short sale are credited to your account but are not a free credit balance to you.  You do not earn interest on the proceeds of sale.  In general you must provide margin equal to the proceeds of sale plus 50% of the proceeds of  sale and you are required to mark to market by maintaining a maintenance margin which varies but is a minumum of 25% pursuant to Reg T.

    Large short sellers are able to negotiate interest on the proceeds of sale.  I have heard that $1,000,000 is the minumum threshhold amount but I do not stand behind that number.

    As long as there is stock available to borrow you can stay short.  No matter how long the position is held any gain is short term for tax purposes.

  •  02-24-2008, 9:14 PM 24077 in reply to 24074

    Re: Shorting Stocks ....

    Reply Quote

    Thanks Uncle Billy,

     

    Let's bring the numbers of the short sale in an example, with the conditions that must be statisfied, as the margin to be staisfied plus 50 % ..etc

     

    I can stay short as long as there are stocks to borrow... can you elaborate on that, I have already borrowed the stocks, how is that going to affect me, and so how can I know the time frame to deliver back the stocks ?

     

    Regarding the intrest negotiation, that means I can earn intrest on the credit from the short sell, if it's greater than 1,000,000 $, from where can I get the exact figure ?

     

    Best Regards,

    The Engineer

  •  02-24-2008, 10:44 PM 24080 in reply to 24077

    Re: Shorting Stocks ....

    Reply Quote

    The initial margin equals 150% of the proceeds of sale.  A $100,000 sale requires initial margin of $150,000.

    You borrowed the stock when you sold it.  You may have to borrow someone else's stock to cover that sale if the lender of the stock sells it.  When there is no stock available to borrow you have a problem.  There is no fixed timeframe to deliver the stock.  You must deliver on demand.

    The amount necessary to convince a firm that you are such a good customer that they need to share the interest on those credit balances varies and is a matter of negotiation. 

  •  02-25-2008, 12:22 PM 24098 in reply to 24080

    Re: Shorting Stocks ....

    Reply Quote

    Best Regards Billy.

     

    Though, having 100,000$ in account, would yield a total capability with margin of 200,000$

    The amount to be sold short of = 120,000 $

     

    Thanks for the clarification

     

     

  •  04-10-2008, 3:10 PM 26759 in reply to 24098

    Re: Shorting Stocks ....

    Reply Quote
    Not to hijack the thread, but what is the lowest price of a stock that I can short? I tried to short a stock that was .97 and it told me the stock was too cheap.
Content Name: StandardBottom
Preview Revision #:
Active Revision #:
Edit Content
 


ZeccoShare is currently in Beta mode. In case you wish to provide feedback, please post it in the ZeccoShare Forum.

ZeccoShare provides a confined and secured environment. The information you share (e.g. profile, holdings, trades, performance) is only displayed to other Zecco members. Guest (i.e. not signed in) are not able to see any individual member information. Guests will only be able to see anonymous, aggregated community data.

Zecco members marked with a ‘Zecco Associate’ medal are employees of Zecco.com. They are not registered representatives of any broker/dealer, and are not registered with any national securities exchange. All information displayed and all posts made by these users are their personal information and opinion, and not the opinion or information of Zecco.com. Zecco.com is not a broker/dealer, has no access to material non-public information about publicly traded companies, and does not make any recommendations regarding the purchase or sale of any security.

All content in the ZeccoShare community is provided for educational and informational purposes only, does not constitute a recommendation to enter in any securities transactions or to engage in any of the investment strategies presented in such content, and does not represent the opinions of Zecco Holdings or its employees. Your use of the ZeccoShare Community is conditioned to your acceptance of all Disclosures and Terms of Service.
Close [X]
Content Name: CommunityDisclaimerLong
Preview Revision #:
Active Revision #:
Edit Content

Terms of Service - Privacy Policy


Zecco.com is a financial portal of Zecco Holdings, Inc., which also provides access to Zecco Trading, Inc.’s trading service. Zecco Holdings, inc. is not a securities broker/dealer. All securities and investments are offered to self-directed investors by Zecco Trading, Inc. Member FINRA /SIPC. More information is located on the disclosures page.

At Zecco Trading, you can make up to 10 free stock trades in any one month that you maintain a $2500 minimum account net equity. After that, you pay only $4.50 per stock trade. Options trades are $4.50 plus $.50 per contract. Only the first account of any account type is eligible for the Zecco Trading, Free Trading program. Any multiple accounts of the same type with the same registration are not eligible for the free trading program. Free Trading Program is only available through Zecco.com. $0 minimum to open cash and IRA accounts.

* Margin accounts require a $2,000 minimum balance for opening and trading on margin. Margin trading involves risks and is not suitable for all accounts.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.

Multiple leg options strategies involve additional risks and multiple commissions, and may result in complex tax treatments. Please read Spread Trading Disclosure.

Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing. A mutual fund/ETF's prospectus contains this and other information, and should be read carefully before investing.

System response and access times may vary due to market conditions, system performance, and other factors.

The content of Zecco Holdings, Inc.’s and Zecco Trading, Inc.’s websites, including research, tools and securities symbols, is for educational and informational purposes and should not be intended as a recommendation or solicitation to engage in any particular securities transaction or investment strategy. You alone are responsible for evaluating the benefits and risks associated with the use of our services or products and to decide which securities and strategies better suit your financial situation and goals, risk profile, etc. The projections regarding the probability of investment outcomes are hypothetical and not guaranteed for accuracy or completeness. They do not reflect actual investment outcomes and are not guarantees of future results. Tools’ calculations do not take into consideration commissions, margin interest and other costs that may impact investment outcomes. All investments involve risk. Losses may exceed the principal invested. Past performance of a security, market, or financial product does not guarantee future results. Neither Zecco Holdings, Inc. nor Zecco Trading, Inc. offers any tax, legal or financial advice.

No consideration was paid for any testimonials displayed on this website. Your experience may vary, and the testimonials are no guarantee of future performance or success. Zecco Holdings, Inc., Zecco Trading, Inc.’s and their independent providers are not liable for any errors, incompleteness, or delays, or for any actions taken in reliance upon information contained herein. By accessing our websites, you agree not to redistribute the information found therein.

Market Data Copyright © QuoteMedia. Data delayed 15 to 20 minutes unless otherwise indicated. RT = Realtime, EOD = End Of Day, PD = Previous Day. Powered by QuoteMedia. Terms of Use.

© 2006-2008 Zecco Holdings, Inc. and Zecco Trading, Inc., Member FINRA /SIPC All rights reserved.