3 ms·
Yeah but you can't short anything without a margin balance. So for a retail account you need something like $100 in margin balance for every $300 of the short p
by minimax 13y ago
Yeah but you can't short anything without a margin balance. So for a retail account you need something like $100 in margin balance for every $300 of the short position. You can't open a trading account with zero balance and just start short selling things to raise cash.
- Nrsolis 13y agoOf course not, but it's trivial to create a synthetic short position with an almost zero cash balance. Not EXACTLY zero, but close enough. e.g. short a low beta stock, hedge that position, short the higher beta stock, and hedge that position.
- minimax 13y agoshort a low beta stock, hedge that position, short the higher beta stock, and hedge that position. That just sounds like gibberish TBH...
- Nrsolis 13y agoWhat part didn't make sense? If you're not familiar with "the greeks" as they relate to tradable securities, then why worry about hedging at all? Just buy and hold.
- minimax 13y agoHe is a retail trader. He's going to have to have a margin balance larger than "almost zero" to put together whatever sort of position you have in mind unless you're just talking about buying far out of the money puts.
- Nrsolis 13y agoYour almost zero might have fewer zeros than my almost zero. But my point still stands: it's trivial to create a synthetic short position that's dollar neutral.