The way it works for big asset managers and the way it should work for personal brokerages is as follows: you pay interest on the amount u have on margin, you receive interest from short sale proceeds. Rate differential aside (usually 1 - 1.5%) the amount of interest paid or earned should be based on the net amount of value of margin positions plus short sale proceeds. 10k in margined stocks, 10k of short sale proceeds means 0 net, you pay nothing (realistically u still pay because the rates are slightly different) Ameritrade, charges a very HIGH rate on long margined stocks and pays nothing on short sale proceeds. So even if you have more short sale proceeds than long margined stocks, resulting in a positive cash balance, they still charge you money on the long margin. Instead of receiving interest you end up paying interest, in very high amounts...big rip off...
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