Daytrading Short & Long Positions in the Same Account

Discussion in 'Trading' started by sandygray66, Jun 22, 2008.

  1. I have daytraded futures for several years, so I don't know how what I'm describing below works in a stock account.

    If I were to open $100K in long positions in 5 stocks first thing in the morning, and simultaneously open $100K in short positions in 5 different stocks first thing in the morning, and close them all out to be flat at the close of the trading day, what would my capital requirements be from a standard (non-prop) brokerage firm?

    So the account would be net flat at the start of the day just after the positions are opened. Would one need capital to fund $200K in positions, or is it essentially $0 capital because the inflow from the shorts cancels the outflow for the longs (plus, of course, the interest cost of borrowing the short positions to sell and commissions costs).

    Thanks to anyone who can knowledgeably answer this question.

  2. 50k
  3. Thanks Mschey. Is that assuming 4:1 daytrading margin, or no use of margin?

  4. 4:1 margin, and assuming that your stocks are greater then $5 in price!
  5. OK, so you're saying that shorting a stock requires the same capital as going long.

    I was thinking that if you're short selling a stock, you would get the proceeds from the sale of the stock. Thus, if you shorted equal dollars to what you were long, the net change to your cash capital would be zero.

    If you, the short seller, don't get the proceeds from the short sale, who does - the broker, I suppose?