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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What margin requirement should I pay for the option positions?
I want to establish the following positions:
Long 50 ABC jan 820 Calls @3
Long 50 ABC jan 675 Puts @4
What margin requirement should I pay for the option positions?
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How does Binance allocate Margin to Cross mode position?
I'm trying to get my head around the values shown in Binance's Futures position, and how they're related to one another. I'm puzzled about the Margin column in the Positions view.
It appears as if the ...
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Is withdrawing cash from a broker in margin in Europe prohibited?
Since about 2 years its impossible to simply withdraw cash from interactivebrokers in Europe on margin. You can buy more stock on margin, but you can't withdraw cash.
Is this something regulatory ...
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IRA in a margin account
I understand that an IRA can't be held in a margin account, or at least margin can't be used. What I didn't know until recently is that the IRS can declare the entire account distributed if it's in a ...
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Isolated Margin
This question about leverage mentions "Isolated Margin".
A bit of googling leads me to think it is some crypto idea. The explanations I can find just states that the risk can be limited to ...
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Can margin interest be added to a debit balance beyond 50% equity?
I carry a margin balance and I am always trying to plan ahead for the worst-case scenarios…
If I get below 50% equity in my mutual fund brokerage account because of market fluctuation and a margin ...
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Can you withdraw capital gains from a stock sale and still deduct interest on the original cost basis?
Say you borrow 50k and buy 100k of shares.
Then the stock rises to 100k
You sell half and cancel out the loan, but also have 50k of capital gains.
If you withdraw the 50k gain to maintain the original ...
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Calculating Canadian Capital Gain or Loss After Loan and Investment
Consider the following hypothetical scenario involving trading with margin in Canada w/ made-up exchange rates:
I take out a $100,000 USD loan on Jan/01 - ($150,000 CAD)
I lose all of it immediately ...
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Do you pay interest on trading with unsettled funds in a margin account?
If you buy/sell a stock with 100% of your account (not on margin, but with a margin account) will it just be settled immediately, or do you need to be on margin and pay interest to be able to trade ...
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Margin calculation on short and long positions combined
Assume an investor goes long on X1 and simultaneously short on X2 both of which cost $1. With margin rate at 50% he is required to deposit 0.5 + 0.5 = $1 margin to make the transaction. My question ...
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What's the relation between free margin and drawdown? (and leverage)
I'm trying to understand whether different leverages can affect the drawdown in forex/CFD trading.
I have noticed that given the same lot size, the bigger the account leverage, then the bigger is the ...
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Will broker release some of the margin to cash account if the market go in my favor?
Say the broker requires a init margin of 40%, and a maintenance margin of 30%.
If I buy 10000 USD worth of stock, depositing a margin of 10000 * 40% = 4000 USD. How do I calculate the required margin ...
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Net Liquidity vs. Maintenance Margin margin call approximation
I have been trying to understand margin calls properly, but since my margin was always insignificant I never really did. Now that my stocks dropped significantly I feel like I may be close to a margin ...
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Mathematically precise explanation of buying power
Can someone please provide a mathematically precise description of how buying power works in a brokerage account? Everything I can find online is too dumbed down to be precise enough that you could ...
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Can I buy index funds without margin and own it like a stock?
I am a total newbie so this might be a silly question but I am trying to buy S&P 500 and own it like a stock.
The problem is that my broker (XTB) only has the option to buy it with margin and ...
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Is this article correct about leveraged tokens?
In this article, it says the following:
Let's say you're interested in buying Bitcoin, so you purchase $100 of it. After a day, the price has increased by 10%, and your investment is worth $110. But ...
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What are the implications of owing more money than is currently in circulation?
I recently found this reddit post in which a user found a bug in a software that did not set a limit on a margin call (my knowledge of what a margin call is is really shaky so I might mess up words), ...
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Futures Options: Options Expiration vs. Underlying Delivery
Does the expiration of a futures option always determine the delivery date of the underlying, in particular does the option always expire into the earliest-delivering futures contract?
For example, /...
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How Do I Trade With Margin On E*Trade?
I'm new to Margin altogether and need some help. Here are my numbers:
Total Margin Requirements $0.00
Total Margin Equity $190.68
Adjusted SMA $205.34
Maintenance Excess ...
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Margin Trading Questions (Reg T, Scaling in, Deposits)`
I'm researching how to effectively trade on margin and I'm having trouble visualizing some scenarios and I haven't been able to find anything online so any help would be greatly appreciated.
Here are ...
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Why is there a maintenance requirement for securities in a margin account with equity 100%?
In TD Ameritrade, margin accounts show a maintenance requirement for the account even if no loan was used to purchase any of the securities. Why is this? How could a margin call ever happen if no ...
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Margin: Is my math correct?
I was recently introduced to the concept of margin and have been reading about it on and off for the last 2 months. I want to use margin funds for my house remodeling, and would appreciate if someone ...
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What's the practical risk of reusing trade proceeds?
I built an algo that buys and sells securities in a few minutes. The idea would be to let it do that hundreds of times a day.
After some paper trading tests, I wanted to test it with a couple real ...
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Using margin/leverage to buy index funds [duplicate]
Brokerages like IB has pretty low sub 2% interest rate per year while index fund grows 10%. Is using borrowing/margin to amplify and purchase more shares of stable growth stocks like snp500 index ...
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Hedging a portfolio by shorting index - Margin calculations
I wish to run a long-only portfolio of stocks and hedge it during turbulent times by shorting a correlated index.
I'd rather short an index ETF for hedging instead of flattening my position. My ...
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How does maintainance margin work when withdrawing money on margin?
I have an account with IB and 50% maintenance margin.
The most common use of margin ist buying stocks with loaned money, for example:
You buy 100 shares for 1$ each, 50% of which is your money, the ...
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What calculations do I need to make to have sufficient balance in my account to avoid margin penalty?
I am talking about NSE (India) here.
Clearing corporations (CC) take 4 snapshots of client positions at random times during the day and see if there was sufficient margin available
and, if there isn’t ...
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Covered call buy-to-close using sale of underlying?
If I write a covered call, my account will be long the underlying and short a call. Say I withdraw the premium from my brokerage account and spend it, invest it elsewhere, etc.
If I want to later sell ...
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What happens if a futures exchange increases margin requirements while I have open positions?
Specifically, what happens if my current position is already close to (or at) the maintenance margin level and the exchange then increases margin requirements?
For example,
First Day (end-of-day):
...
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Can a leveraged ETF's net assets suddenly go below zero?
When trading stocks on margin or when holding futures, sudden price movements may wipe out the posted margin. In some cases, the trader may even lose more than the posted margin (i.e. the trader owes ...
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