Margin Trading from A to Z – A Complete Guide to Borrowing, Investing and Regulation

<p>Preface xi</p>
<p>About the Author xv</p>
<p>CHAPTER 1 Cash Accounts 1</p>
<p>Sale of Securities 3</p>
<p>Paying for Securities by the Sale of Other Securities 3</p>
<p>Delivery against Payment 4</p>
<p>Employee Stock Options 6</p>
<p>Chapter One Questions 7</p>
<p>CHAPTER 2 Initial Federal Margin Requirements 9</p>
<p>Purchases 9</p>
<p>Sales 16</p>
<p>Meeting a Margin Call 17</p>
<p>Chapter Two Questions 19</p>
<p>CHAPTER 3 Initial and Minimum Maintenance Requirements 21</p>
<p>Initial Requirements 21</p>
<p>House Requirements 23</p>
<p>NYSE Minimum Maintenance Requirements 23</p>
<p>Chapter Three Questions 29</p>
<p>CHAPTER 4 The Special Memorandum Account 31</p>
<p>Customer′s Account 35</p>
<p>Chapter Four Questions 42</p>
<p>CHAPTER 5 Short Sales 45</p>
<p>Covering Short Sales 51</p>
<p>NYSE Minimum Maintenance Requirements 52</p>
<p>Sample Transactions 53</p>
<p>Short Sale versus the Box or Short against the Box 55</p>
<p>Prime Broker 59</p>
<p>Chapter Five Questions 62</p>
<p>CHAPTER 6 Bonds 65</p>
<p>U.S. Government Securities 67</p>
<p>Zero–Coupon Government Obligations 67</p>
<p>Municipals 69</p>
<p>Nonconvertible Corporate Bonds 72</p>
<p>Chapter Six Questions 74</p>
<p>CHAPTER 7 Miscellaneous Categories 77</p>
<p>When–Issued and When–Distributed Transactions 77</p>
<p>Customer s Accounts 78</p>
<p>Marks to the Market 80</p>
<p>When–Distributed Securities 80</p>
<p>Segregation of Customers′ Securities 80</p>
<p>Review of Customers′ Accounts 81</p>
<p>Interest Charges 83</p>
<p>Margin on New Issues 85</p>
<p>Day Trades 85</p>
<p>Requirements for a Pattern Day Trader 86</p>
<p>Time and Tick 87</p>
<p>Chapter Seven Questions 89</p>
<p>CHAPTER 8 Options 91</p>
<p>Definitions 92</p>
<p>Additional Definitions Related to the Types of Options 93</p>
<p>Examples 95</p>
<p>Requirements for the Purchase and/or Sale of Options 100</p>
<p>Long–Term Equity Anticipation Securities 101</p>
<p>LEAPS 101</p>
<p>LEAPS Example 102</p>
<p>Bull Spread Call Debit 106</p>
<p>Bear Spread Call Credit 107</p>
<p>Bull Spread Put Credit 107</p>
<p>Bear Spread Put Debit 108</p>
<p>The American Style 108</p>
<p>The European Style 108</p>
<p>Other Types of Options 108</p>
<p>Index Options 108</p>
<p>Interest Rate Options 109</p>
<p>Additional Details Concerning Options 113</p>
<p>Chapter Eight Questions 114</p>
<p>CHAPTER 9 Portfolio Margining 121</p>
<p>Margin Deficiencies 125</p>
<p>Chapter 9 Questions 126</p>
<p>Eligible/Hedged/Unhedged Positions 126</p>
<p>Account Set–up 126</p>
<p>Unlisted Derivatives 126</p>
<p>Liquidations 127</p>
<p>APPENDIX A The Federal Reserve 129</p>
<p>APPENDIX B Customer Margin Account and SMA Sheets 137</p>
<p>APPENDIX C Answers to Chapter Questions 139</p>
<p>APPENDIX D Final Examination Questions 151</p>
<p>APPENDIX E Final Examination Answers 161</p>
<p>Glossary of Terms 169</p>
<p>Index 177</p>