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It can't happen (going below zero). Variation margin on the derivatives
should force you to liquidate before you ever get negative.
Regards
DanG
> Charles Moulton wrote:
>
> at about $5 they reverse split it so that it will be marginable.
>
> -----Original Message-----
> From: delta88343@xxxxxxx [mailto:delta88343@xxxxxxx]
> Sent: Thursday, February 22, 2001 7:37 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: [RT] Negative Value?
>
> I trade the Pro Funds Ultra OTC for the long side and Pro
> Funds Ultra Short
> OTC on the short side.
>
> (Exited my Ultra Short positions today by the way)
>
> But for the Ultra OTC (long), the fund value would display
> negative values
> long before the NASDAQ would reach zero due to the futures
> and options
> leverage which helps the fund maintain a Beta of 2.
>
> So the obvious question is, how would that work if the
> nasdaq continues to
> decline. The fund value could not have a negative value,
> because how could
> one then buy it. It could go negative however due to the
> leveraged effect of
> the futures and options contained within the portfolio.
>
> Stupid question I'm sure, but if someone could enlighten me
> I'd appreciate it.
>
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