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One of the most interesting series of articles I've read recently concerns
how these "trading shops" get some day traders to lend money to other day
traders overnight (at very high interest rates) so they don't have to
liquidate their trades immediately to meet margin calls. The usual result
is the day trader who borrows loses even more - and the day trader who lends
loses all he lent. My impression is that there are ongoing SEC
investigations into these practices for possible violations of US margin
requirement rules. Robyn
Lamont Cranston wrote:
> ...The only other aspect of this increase in the number of day traders
> seems to be coming from these brokeages firms that open up these
> shoppes, so to speak, that allow underfunded individuals to come in and
> use the firms data feed, computers and services for a fee and begin to
> trade. This to me is where most of these individuals are losing and
> losing in great numbers.
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