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Author Topic: Shorting a Stock - How do the rates work out? What does it cost me?
permanentjaun
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I'm interested in trying my hand at shorting stocks. I seem to find stocks that drop more often than not anyways. [Wink]

I'm a little new to the rate structure though and how a margin account will work. Say I have a $10,000 dollar account and I care to short $10,000 worth of stock. Is my account not charged any interest since I'm not using any leverage and only shorting the amount that is in my account? The question essentially is asking, "Am I only charged interest on the trade if I try to short more than the $10,000 I have in my account?"

Also, is interest generally an APY rate? I'm looking to be in and out of positions in a matter of days and taking small 5-10% wins. I would like to know how much rate/fees are going to cost me such that I know how much movement I need to actually post a profit.

Can anyone shed some light on figuring out the math for all this?

Thanks,
Matt

Posts: 1504 | Registered: Sep 2004  |  IP: Logged | Report this post to a Moderator
glassman
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ask your broker directly. they have different policies at different houses...

i don't play short, i overdrew on my karma account years ago.. [Big Grin]

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Don't envy the happiness of those who live in a fool's paradise.

Posts: 36378 | From: USA | Registered: Sep 2003  |  IP: Logged | Report this post to a Moderator
metal1
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reg t for short accts is actually 150%. as far as rates go, you need to check with your broker, each one varies. you can google for tons of info on short sales and short margin..
Posts: 1045 | From: novato,ca,usa | Registered: Aug 2003  |  IP: Logged | Report this post to a Moderator
   

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