dumb question about margin and shorting

Discussion in 'Trading' started by mockingbird, Jan 3, 2002.

  1. If I have 4:1 margin, and a 25,000 account, I can buy 4000 shares of a 25 dollar stock -- my question is, with the same account and margin rules, how many shares can I short the stock, given that the broker has enough shortable shares available.
  2. also 4000 shares if i'm not mistaken
  3. jsmith


    You can short as much as you can buy.
    You have to be careful because you may lose your
    4:1 margin if the stock goes against you and you
    have less than 25k.
  4. The margin maintenance requirements may be higher for short positions, so consider that if you hold any positions overnight. At IB, you get 4-1 intraday, but 3-1 for overnights, same for longs and shorts.
  5. lescor -

    Do you get 3-1 on overnights on the day you initiate the overnight position or do they drop the initial overnight margin to 2-1 (and then move to 3-1 for maintenance margin on subsequent nights)?

  6. I believe it stays at 3-1. As far as I know, there is no more 2-1 for anything. I don't hold much overnight, so I haven't looked into it too much.
  7. I would not suggest you short 4000 shares of a $25 stock unless you are very experienced.
  8. oneway


    There are no stupid (dumb) questions?

    Only stupid answers.......

    Antares Equity LLC
  9. oneway


    CandleTrader: "I would not suggest you short 4000 shares of a $25 stock unless you are very experienced."

    Would 3500 be ok?


    Antares Equity LLC
  10. It was only an example to ask how margin works for shorting, it wasn't something I was actually planning to do.
    #10     Jan 6, 2002