Questions tagged [margin]
A margin account is an account offered by brokerages that allows investors to borrow money to buy securities. An investor might put down 50% of the value of a purchase and borrow the rest from the broker. The broker charges the investor interest for the right to borrow money and uses the securities as collateral.
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Pattern day trading, margin, and day trade buying power
I have some questions regarding the rules surrounding pattern day trading, margin, and day trade buying power and how they interact with each other. Assume to following scenario:
The account is a ...
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What are the situations that could cause unlimited liability in my stock brokerage account?
I have a stock brokerage account, and I want to make sure that the things I do in it will not cause me to be liable for more than the amount I put into the brokerage account. My question is: under ...
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Effect on margin of a cash withdrawal
I have a Reg-T margin account with Interactive Brokers. I would like to confirm my assumptions about the effect that making a cash withdrawal on margin would have on the account.
Let's say I have $200 ...
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Can I use the money I obtained from shorting a stock? [duplicate]
If I were to short a stock currently valued at $100, I understand that $100 would be placed into my margin account. Can I use that $100 to purchase stocks?
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What's the difference between margin financing and borrowing money from someone else?
Why don't investors borrowing money from banks or other institutions to buy stocks instead of buying on margin? Margin financing increases your purchasing power but so does borrowing money from ...
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Do I earn interest when shorting stocks?
Suppose I short 100 shares of a $5 stock. My cash balance will be +$500 due to the short position. Does this $500 earn any interest?
I have heard two opposing answers:
The $500 earns interest, and I ...
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Can I buy with cash on IB margin account without paying margin fee?
I'm trying to understand how IB margin account works. When I buy a stock I always see there "Initial Margin" and "Maintenance Margin" fields regardless of cash available. Should I always pay margin ...
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"Day trade buying power" versus "Available to day trade"
on my Charles Schwab account I have 2 different fields:
Day Trade Buying Power: $50,000
Available to Day Trade: $203,000
Can someone explain the different between the 2? Day trade buying power is ...
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Does adding stocks/cash equal-in-value to my losses on margin prevent me from owing more interest?
I think I understand the concept behind margin accounts, but I want to be sure so I am using a made up example to ensure that I don't burn myself in real life.
If I have 10,000$ in stocks in a Reg T ...
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Is margin interest applied to intraday trades?
I'm trying to understand how the margin interest charge is calculated when you borrow money from a broker like Fidelity to buy stocks for intraday trades.
If the rate is 8% then is the daily charge ...
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Do I always buy stocks on margin in a margin account?
I'm trying to understand the logic of RegT margin accounts.
Let's assume that I have a $10,000 account and I purchase stock XYZ worth $5,000.
Will my broker automatically give me a loan of 50% (=2,...
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Settlement dates re pattern day trading stocks
I've been trading options on a pattern day trading account for a couple of years and now want to trade stocks.
Options are settled overnight and funds available the next day. And day trading buying ...
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Is my FX brokerage manipulating my profit margin to pay out less?
USDCAD pair has moved 41.90 pips in my favour @ 0.01 lots (broker showing profit of $3.01)
USDJPY pair has moved 52.30 pips against me @ 0.01 lots (broker showing loss of -$4.85)
At $0.10 per pip (0....
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Using unsettled cash to buy securities on Interactive Brokers
From Interactive Broker's Availability of proceeds in a 'Cash' type account article:
Account holders who wish to have access to settled funds prior to the settlement day may do so by electing an ...
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Maintenance margin for fixed collateral
My portfolio is composed of all-equity plus 20% out of money protective puts. If the market drops 20%+ (as it is doing now), my portfolio value is constant at 80% of my original investment.
I would ...
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