Short selling

I

indicator777

I've have done very little short selling since I started trading and I have a question for the experts:

If I short sell 100 shares of a $100 stock can I use the $10K to go long 200 shares (only as an example) of a stock that trades at $50? What would be the ramifications of these transactions in terms of margin etc.? Thanks.
 
indicator777 said:
I've have done very little short selling since I started trading and I have a question for the experts:

If I short sell 100 shares of a $100 stock can I use the $10K to go long 200 shares (only as an example) of a stock that trades at $50? What would be the ramifications of these transactions in terms of margin etc.? Thanks.
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your question is basic. the answer is no. you must put up 5k of your own funds or long stock worth 10k to margin the short sale.
 
SunTrader said:
A possible gain (and the initial funds), whether from a long or short trade, is only yours to use again once a trade is closed.
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not true, if you have profit on a trade a partial part of the trading profit can be withdrawn or used as additional margin.
 
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sle said:
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(Mouseover text)
"I'm selling all my analogies at auction tomorrow, and that witch over there will give you 20 beans if you promise on pain of death to win them for her."
"What if SEVERAL people promised witches they'd win, creating some kind of a ... squeeze? Gosh, you could make a lot of–"
"Don't be silly! That probably never happens."
 
As far as I understand it, you cannot "borrow or withdraw" paper profit but I don't trade equities for the last 20 years. Only futures. So you might be correct.
 
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