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Margin account trading
Posted on 1/19/21 at 5:21 pm
Posted on 1/19/21 at 5:21 pm
I’ve been using a cash account for a while. I made the switch today to a margin account. Any info for a newbie to the margin game?
Also, my account is under 25k, but since it’s margin, I can buy a stock one day and sell it the next without any GOod faith violation correct?
Next, are you free of the pattern day trader rule or I have to get my account past 25k?
Also, my account is under 25k, but since it’s margin, I can buy a stock one day and sell it the next without any GOod faith violation correct?
Next, are you free of the pattern day trader rule or I have to get my account past 25k?
10
Posted on 1/19/21 at 5:30 pm to Yoked
quote:
I made the switch today to a margin account. Any info for a newbie to the margin game?
Not trying to be a dick, but if you're a newbie you should NOT be trading on margin.
Posted on 1/19/21 at 5:30 pm to Yoked
Be careful baw
If you lose they’ll want you to put more money in
If you lose they’ll want you to put more money in
Posted on 1/19/21 at 5:37 pm to Yoked
I would call etrade and ask these questions. You will get advice here, but when you are leveraging up, I would rather hear it from the source myself.
Posted on 1/19/21 at 5:42 pm to Yoked
I know just enough about margin to know I don’t know enough to be using margin. You sound like you’re in the same position.
I actually have this question myself. Much like a IRA has limited margin I wonder if it works the same with a true margin account. Instant settlements and what not.
quote:
but since it’s margin, I can buy a stock one day and sell it the next without any GOod faith violation correct?
I actually have this question myself. Much like a IRA has limited margin I wonder if it works the same with a true margin account. Instant settlements and what not.
Posted on 1/19/21 at 5:42 pm to Pendulum
Word. I’ve been trading my cash account for a couple months. Up about 30%. I know the risk of margin calls and what not. Just wanting info on the questions asked. Haven’t found my answers researching YouTube and forums. That is all.
I appreciate the advice though. I know everyone is probably making money so can’t brag about me knowing some shite.
I appreciate the advice though. I know everyone is probably making money so can’t brag about me knowing some shite.
Posted on 1/19/21 at 5:47 pm to Yoked
So if you buy a stock on a Monday, and sell it on a Tuesday, that doesn't constitute a day trade. If you have less than 25K in your account, you're allowed 3 day trades in a consecutive 5 trading day window. A fourth day trade would flag you as a PDT
Posted on 1/19/21 at 6:26 pm to Yoked
If you're trading under $25K you are still subject to PTD rules.
Posted on 1/19/21 at 6:36 pm to Yoked
What is the interest rate on your margin positions?
Posted on 1/19/21 at 6:39 pm to Yoked
You have to maintain the $25k minimum to avoid the pattern day trading tag.
Posted on 1/19/21 at 6:40 pm to Yoked
quote:
Word. I’ve been trading my cash account for a couple months. Up about 30%.
No offense but this isn’t a qualification for trading on margin
Posted on 1/19/21 at 8:28 pm to Upperdecker
Can’t be scared all your life. Only way to learn is by doing. I do a ton of research and follow forums. I may be a degenerate but I’m well aware of the risk. I have my cash account as well, using my margin account with stop losses on my for my stocks I’m extremely confident on.
Thank you all for the advice and words of discouragement.
Last question, what discord’s, youtubers, etc you follow? I have stuck with ziptrader but I like to branch off
Thank you all for the advice and words of discouragement.
Last question, what discord’s, youtubers, etc you follow? I have stuck with ziptrader but I like to branch off
Posted on 1/20/21 at 7:33 am to Yoked
quote:
Only way to learn is by doing.
This is such bullshite advice people give. And believe. Sorry It’s actually better to learn from some else’s experience. I don’t need to put my hand on the stove and burn my hand to know it’s hot when someone else has already done that.
Posted on 1/20/21 at 7:42 am to Yoked
quote:
Can’t be scared all your life. Only way to learn is by doing. I do a ton of research and follow forums. I may be a degenerate but I’m well aware of the risk. I have my cash account as well, using my margin account with stop losses on my for my stocks I’m extremely confident on.
I started using margin last May/April, and it’s helped my returns significantly. Since I started using it, I’m up 330% overall in my portfolio. Granted, the timing could not have been better and a lot of luck went into that (including some excellent stock picks like ROKU, PINS, FSLY).
But I will argue that margin trading/investing can be a winning strategy. First off, interest rate will be a huge factor. RH has 2.5% interest, that’s tough to beat and gives me a lot of peace of mind even when things are going red. You’re going to get beat up badly when you lose - but you have to trust your strategy/process and not panic. Know that in the long run, if your strategy is sound and your rate is manageable, you will come out ahead.
Personally, I am very conservative with my margin buys. I only buy companies that I’m okay holding for years if I have to. I’ll also immediately sell calls against the shares, guaranteeing myself a profit if they are assigned. If they are assigned - I make money. If not, I’m comfortable holding and will continue selling calls against them until they do get assigned. I’m okay capping my gains because these are bought with margin and I don’t plan on being in them forever, I’m trying to make a profit as quick as possible. Another strategy I use is selling puts on stocks I would also like to hold at favorable strike prices. This was my margin isn’t actually being used, but is held up to secure the funds should the option be assigned. Then I would immediately sell calls against the newly assigned stock. I like to be conservative with my margin buys and take the profits when they come, earn premiums by selling options when I have to hold, and be comfortable holding long term if I have to.
Another piece of advice - get familiar with your margin maintenance. You should know your portfolio value and what would have to happen for a margin call to be issued. I don’t max out my margin and always give myself a lot of breathing room to prevent margin calls.
Posted on 1/20/21 at 7:42 am to htcthc321
quote:If you get flagged you get suspended for 90 days, but you can still by pass that suspension by going to a different broker.
So if you buy a stock on a Monday, and sell it on a Tuesday, that doesn't constitute a day trade. If you have less than 25K in your account, you're allowed 3 day trades in a consecutive 5 trading day window. A fourth day trade would flag you as a PDT
But yeah you can day tread, but as thc321 said, only 3 day trades within a 5 day window. You can day trade those 3 days then repeat the next week once it resets.
Posted on 1/20/21 at 7:49 am to Yoked
quote:
Can’t be scared all your life. Only way to learn is by doing. I do a ton of research and follow forums. I may be a degenerate but I’m well aware of the risk. I have my cash account as well, using my margin account with stop losses on my for my stocks I’m extremely confident on. Thank you all for the advice and words of discouragement.
30% returns doesn’t make you a pro dude. Despite all your research you’re asking some really basic questions. And using stop losses when you’re extremely confident about a stock is counterintuitive
Posted on 1/20/21 at 8:01 am to Yoked
3 times within a 5 day period.
Posted on 1/20/21 at 8:47 am to Yoked
This is the top
Posted on 2/8/22 at 9:32 am to LSUtiger89
quote:
This is such bull shite advice people give. And believe. Sorry It’s actually better to learn from some else’s experience. I don’t need to put my hand on the stove and burn my hand to know it’s hot when someone else has already done that.
Ya'll are hammering this guy without reasoning.
just like with this post in the bold.
What if the person who has "experience" is a proud person who has only lost money.
Second. The poster is saying that he IS learning from experienced traders. It might be online, but he is learning.
And yes, you can learn by doing. You learn to catch a ball by doing. See how easy it is to make a simplistic comparison?
So to the OP.
1- Be very aware of the monthly fees/interest rates. They will come for it and take it... like it or not.
2- Yes posters are right. If the market drops, they will require you either put more money in OR sell off stocks to move your account above the margin threshold. Selling a stock for a loss....
3- No, margin on accounts under 25K does not allow you day trading. You have the same amounts of day trades allowed as explained above.
ONE THAT I HAVE NOT SEEN in the responses:
- They can change the amount of margin on a stock when ever they choose.
EXAMPLE:
Ticker "MyFavStock" is at $100 per share and the amount of Margin used was at 40%. You used 60% cash (or $60 dollars) and 40% margin was used (or $40 dollars). You purchased 100 shares.
They decide that they will no longer allow margin on that stock (yes they can make that decision). You are now going to have spend $40 per share or $4000 in this case.
This can compound problems too because they are not asking you for your permission. They just tell you they are doing it and TAKE $4000 (if it's there in cash) out. If you don't have the cash... you now have to put money in or sell stocks. OR they WILL CASH OUT THAT STOCK.
This could cause you to now have little money in your account. if the market drops off.... you are in trouble... margin calls.
Good luck
Posted on 2/8/22 at 9:39 am to Jjdoc
you're responding to a year old post that was bumped by a bot...don't expect an answer
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