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At 07:49 PM 3/31/98 -0500, Bob Young wrote:
>I intend to implement a hedged portfolio strategy in common stocks. I
will hold in
>my account approximately equal dollar values of long and short positions,
>making me net market neutral.
>
>For this I require a margin account with a stockbroker. I will be trading
quite
>actively, so low commissions are important, but another consideration is the
>treatment of margin interest. Suppose I were to open an account with 100K
in
>cash. Then I buy a basket of stocks long, using the whole of the 100K,
and at
>the same time sell short a basket of stocks to the same value. I should
have no
>debit balance, and so pay no margin interest. However, one broker I have
>contacted informs me that I will be charged margin interest on the entire
short
>portfolio, while another says I will not be charged unless I have a debit
balance,
>but, they charge a much higher commission. Can anyone recommend a broker
>with both low commissions, and the correct treatment of margin interest?
>
>Another consideration is the interest on the cash received form the short
sale of
>stock. I woul hypothetically own 100K worth of stock, plus have sold short
>another 100K, for which 100K in cash has been received. None of the
brokers I
>have contacted is willing to pay me interest on this cash. Does anyone
know of
>a broker who pays interest on cash recieved from the short sale of stock?
>
>Thanks for any advice
>Bob Young
>
Bob:
Available online are Fidelity Investments, E-Trade, E-Broker, and others
whose execution record are uncertain.
petena
petena9090@xxxxxxxxxxxxxx
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