| BUSINESSWEEK ONLINE : MARCH 22, 1999 ISSUE | ||||||||
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| PERSONAL BUSINESS
How to Do It -- You borrow 100 shares of Yahoo! and sell them short at $150 a share. -- The sale proceeds of $15,000 go into a margin account, along with a 70% maintenance requirement on Net stocks of $10,500, for a total balance of $25,500. -- If Yahoo! falls to $100 a share and you buy back 100 shares, you make $5,000--the difference between the $15,000 from the initial sale and the $10,000 cost of replacing the borrowed stock. You also regain access to the $10,500 in equity. -- If Yahoo! increases to $200 a share and you cover at that price, you lose $5,000. If you maintain the short position, each week the broker ''marks to market'' Yahoo!'s shares and requires you to put up additional equity of up to 70% of the shares' value. -- Brokerage commissions on both the sale and repurchase would be about $120. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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