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Bank stocks (XLF +3.7%) jump out of the starting gate after the central bank liquidity push,...
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Wednesday, November 30, 2011, 9:46 AM ETBank stocks (XLF +3.7%) jump out of the starting gate after the central bank liquidity push, shrugging off the S&P downgrades: JPM +5.4%, MS +5.9%, C +5.3%. Bank of America (BAC +5.3%) looks to avoid collapsing through $5, at least for another day - it's a line in the sand, not because it’s a round number, but because many fund managers will be forced to sell if it closes below that mark.
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This news story has 4 comments:
I guess if it did a reverse split after it fell below $ 5 then all these stupid investors would jump back in? Awesome.
I think you missed the point. Stock under $5 a share means a margin call has to be met at a higher call %. Do some research and you will know what I mean. Each $1 that a stock falls, the margin % to hold this stock increases. Anything under $5 is over 50% required call to hold into a margin account. Some trader platforms, such as Scottrade the required amount is 75% anything under $5. Hope this helps. Keep in mind that many brokers are buying on a margin account, such as myself.
Any continued holding of their securities should be contemplated with the possibility of a complete loss. I'm selling all my preferred shares but continue to hold their bonds with the bankruptcy prospect enabling some prior claim to assets before the preferred holders get anything. To benefit on the prospect of their turn around, I'm keeping the TARP warrants as a speculation. These lock in the total loss possibility at a fraction of the price of the common shares.