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Started By
Message
re: Investing on Margin
Posted on 9/22/09 at 9:46 pm to LSURussian
Posted on 9/22/09 at 9:46 pm to LSURussian
I think I'm confused on this. My buying power for marginable securities is a little bit more than my holdings + cash(only a few dollars, rest is stocks). Non marginable is half that. You're probably right and maybe I'm confused. For my account, margin req for stocks priced 5 to 5.99 is 50%; 6 and up is 35%. Does that mean 200% more gains and losses if I own stocks valued at 6 or more 
They're giving money to the wrong guy.
I think
Figures
They're giving money to the wrong guy. quote:
You put up a dollar and you can borrow a dollar to go with it to buy a stock. Is that what you're saying?
I think
quote:
Yes.
Figures
2
Posted on 9/22/09 at 9:51 pm to LSURussian
Russian, you were right, well done !
Posted on 9/22/09 at 10:01 pm to lynxcat
I do not.
It happens that you are better off borrowing the money from a home equity loan. The interest rate is lower, you won't be subject to margin calls and you have a decade or more to pay it if the stock goes belly-up.
Of course, wiser heads would say it is generally a bad idea to borrow against your home to play the stock market. Regardless of whether you agree with that or not, it is better than going on margin.
So if you aren't willing to do a HELOC, don't go on margin.
It happens that you are better off borrowing the money from a home equity loan. The interest rate is lower, you won't be subject to margin calls and you have a decade or more to pay it if the stock goes belly-up.
Of course, wiser heads would say it is generally a bad idea to borrow against your home to play the stock market. Regardless of whether you agree with that or not, it is better than going on margin.
So if you aren't willing to do a HELOC, don't go on margin.
Posted on 9/22/09 at 10:13 pm to foshizzle
quote:From a dollars and cents perspective, this is absolutely correct. It's just that the broker makes it so convenient to execute a trade and simultaneously borrow the money for the trade. No loan apps, nothing to do but buy the stock.
It happens that you are better off borrowing the money from a home equity loan.
Posted on 9/22/09 at 10:18 pm to Zilla
(This ain't my first rodeo....
)Posted on 9/22/09 at 10:20 pm to wizard of smart
quote:I probably have confused you as well. The bottom line is just go by whatever your broker says you can borrow and you won't be breaking any securities laws. I use Schwab and maybe Schwab is more conservative than your broker. Or, maybe we are saying the same thing, just saying it differently. I have never approached my maximum margin limit so I'm most definitely NOT an expert on the subject.
I think I'm confused on this.
Posted on 9/22/09 at 10:40 pm to LSURussian
I just opened another account with a different broker. One account looks like I can get dollar for dollar now, and maybe dollar for two in the future. My other account got denied for margin trading
Posted on 9/30/09 at 12:21 pm to wizard of smart
I just bought on margin this morning, at a value near my account value. Could have gotten equal but I want to buy quick and did quick math. Just exited my margin position with nice little profit 
.
I'm changing my position on margin, it's too risky to hold more than a day
. I'm changing my position on margin, it's too risky to hold more than a day
Posted on 9/30/09 at 1:25 pm to lynxcat
quote:In a way, that's how most people handle their largest investment --- their house. Obviously not the same, but a leveraged asset ntl.
Do any of you do this?
Posted on 9/30/09 at 3:12 pm to NC_Tigah
Sorta - a margin account and a mortgage are both secured loans although the specific terms are obviously a bit different.
My point is that if you (the OP, that is) is going to borrow to invest in the market to begin with, the terms are better doing it in a home equity account. Which implies that if borrowing against your home makes you nervous, maybe you shouldn't go on margin either.
My point is that if you (the OP, that is) is going to borrow to invest in the market to begin with, the terms are better doing it in a home equity account. Which implies that if borrowing against your home makes you nervous, maybe you shouldn't go on margin either.
Posted on 9/30/09 at 3:44 pm to wizard of smart
quote:
lynxcat
Wei-Ling's class?
This post was edited on 9/30/09 at 4:51 pm
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