How do i short stocks i just got a margin account?

Question

let's say i have 200 cash and my margin equity is 200 dollars. If i want to short, whats the limit on the amount short value i can sell if the maintenance was 25 percent. Or am i only allowed to sell as much as my margin equity is valued at 200$. If i dont touch the 200 cash can i use it go long on another position?

Answer 1

Read a few dozen books on trading.

The risk in shorting is unlimited. Are you really experianced enough for this?  Be realistic. It takes years to learn how to trade, it takes much more to learn to short.

Buy a "put"... it's safer. At least with a "put" you know your maximim risk!

(I really don't suggest you trade options.... they're 100 times harder than shorting!

Answer 2

If you have a margin account with a US Borkerage firm, you can not have a margin account with $200, there is a minimum requirement of $2,000 in equity (not a balance but equity).

Before you trade or even sell short, you better have a better understanding of not only short selling and margins, but also the rules and regulations governing short selling and margins.

Answer 3

if you have 200 in cash you can short 150 dollars worth of stock (technically and by your reasoning) practically speaking of course this would not be the case. If you shorted 150 dollars worth of stock you would pony up cash at the end of any day the stock closes above what you sold it for . . . .  Oddly, if you had 200 dollars worth of equity (not cash) you would do better in a market that is going against you.

The other problem is that you can't simply decided to short XYZ. The company you are working with must have the XYZ stock as collateral, which means you are required to ask . . .  if they then lose their position in the stock yours will be closed out . . . . there are lots of reasons why you need to be very very careful with terms and balances.

good luck, remember; if you buy something all you can lose it what you invested . . . .if a short sale goes against you your potential lose is unlimited.