Ok, let me asnwer one by one.
-wang-lao-wu(钻石王老五);
2008-10-19(#54056@43)
Under the water means you have a paper loss. If you buy for 23, and the stock drops to 22.98, you will be under the water. Not a big deal. But you should not be DEEPLY under the water.
-wang-lao-wu(钻石王老五);
2008-10-19(#54058@43)
Generally speakng, you can keep your short positions as long as you like and as long as your margin can support.For some small-floating stocks, however, the broker can force you to cover your short positions. Let's me say you short sold FNM at 21. Your broker lent other people's stcok to you for short selling. When FNM dropped to $5, if those guys want to cut loss, your broker may cover your positions on your behalf.
Techincially, this is called "buy-in".
There are some reasons that can lead to buy-in. But I have not yet got into "buy-in" for a single time.
-wang-lao-wu(钻石王老五);
2008-10-19{468}(#54060@43)
If you have $10000, and you have bot 100 shares of SOHU for $80, your leverage will be .8. If SOHU drops to 5000, your balance will be $7000, and your leverage will be about 8000/7000= 1.13.For Short selling, you can do similar calcualtions.
If you short 100 shares of SOHU for $80 and it drops to 50, you will have a big paper profit of $3000, and your balance will be 13000, and your leverage will be as low as about .36.
If you have option positions, the calculation will be complicated.
-wang-lao-wu(钻石王老五);
2008-10-19{310}(#54061@43)
Diffrent brokers have different margin requirements. For IB, if you have 15000 and you have short sold 200 SKF for 130, they probably will cover 50 shares when SKF jumps to 180.
-wang-lao-wu(钻石王老五);
2008-10-19(#54068@43)