InterDigital Inc (IDCC)

[The Count]

Margin is very dangerous

The purpose is to leverage your investment by investing other people's money. Not a bad concept. However with a volatile investment like the stock market, and especially a high risk, volatile stock like IDCC, you can be absolutely correct about the long term price and end up losing everything.

For example, let's say the arb panel comes back and says "No trigger, nothing due from Nokia at this time." The stock price would plunge back to the mid teens, and maybe lower if panic or frustration set in. Two weeks later IDCC signs up MOT for a 3G license at a good rate, and the other players fall in line shortly there after. IDCC now is soaring at levels far above today, but unless you were able to meet your marging call you've been sold out of most or all of your position. Bottom line, you are playing with fire unless you have access to liquid resources to cover a margin call.

I've used margin on two occasions with IDCC. Both times good news am came out and and being the IDCC-aholic that I am, I knew within minutes of the news. I bought 20% more stock for a day trade. I was out by the next day both times. The price continued to run up after I closed the margined purchase both times, but that's okay. I don't have to squeeze the last dollar out.

Hey, let's be careful out there - you're playing with real money.

Frank