/biz/ - Business & Finance

I think:
>Non-Marginable Securities - mutual funds that and OTC stocks that are not easily sold
Marginable Securities - equities that are easily sold

You have about $23k in not-cash assets?

>>355884
Where are you getting the $23k from?

As it stands now, when trying to buy /biz/'s GMO stock, sitting at $1, I am allowed 5900 shares that can be purchased.

If I try to purchase 6000 shares, it says there is insufficient money in my account.

I currently have no positions in any stocks at the moment.

Pretty simple. You have two different borrowing limits in a margin account: one for marginable securities and one for non-marginable securities. The limit for marginable securities is higher because if you borrow to buy marginable securities, the broker will loan you even more money (over your initial margin limit) and hold the marginable securities as collateral. They won't do this with non-marginable securities.

The reason you can't buy more than $6000 of some shitty stock is because its a non-marginable security. You're trying to exceed your borrowing limits for that type of security.

>The fact that you don't already know these thing suggests to me that you shouldn't be playing with margin accounts. Everyone has to learn sometime, I understand, but you are playing with fire.

>>355907
Thanks iHaz. Been a fan of you ever since /econ/.

Am I correct in saying that when my 3 day trades have settled, I should no longer have a negative balance? Like I mentioned, I've only achieved $300 profits so far.

I am simply trying to use a margin account to achieve the $25k DT limit as quickly as possible. I've developed a good strategy for short run profits that thus far has not failed me.

>>355925
Also, where do my $300 return to? Half to my non-margin, other half to my margin? Or percentage based?

I just know that not all 100% of your profits are yours if you use a margin account - just not sure how it is distributed.

>>355925
Your screen shot may have omitted the column headings. I'm not sure what the two columns are supposed to indicate.

But as far as I can see, you don't have a "negative" margin balance. Or more accurately stated, you do have a negative margin balance, which is the same thing as saying you have a positive cash balance.

>>355929
Your question doesn't really make sense. 100% of your profits are yours.

If you have a margin balance (owe money to the broker), it gets deducted from your settlement account on a periodic basis. If there's not enough in your settlement account to pay off the margin, then you will start accruing interest. If there is cash (surplus) in your margin account it gets swept into your settlement account after some period of time.

>>355937
Thanks buddy. Appreciate it.

I guess from the multi-millionaire's perspective, I'm doing alright.

I'm hoping to achieve the $25K needed by the end of the year - that is my goal.

Wish me luck!

>>355938
I won't tell you NOT to trade on margin, because I did it when I was younger too. It can be a useful tool, in theory.

But it is potentially a very expensive shortcut. 9% at TD and 8.5% at eTrade, That'll suck your returns into negative territory quite easily. Caveat emptor.

>>355938
>>355949


If you're trading on margin, for fuck's sake at least do it at a broker that will lend you the money at rates below that of a mafia don.

Interactive Brokers will lend 50% margin in a reg T account for 1.5%, and they'll give you 85% margin in a portfolio margin account if you have over $100k. Over a million and the rate gets bumped down to 1%.

It's next to impossible to make satisfactory long-term gains if you're paying 8%+ interest on your loan.

>>355949
>But it is potentially a very expensive shortcut. 9% at TD and 8.5% at eTrade, That'll suck your returns into negative territory quite easily.

This is what I dont understand. I mentioned the $300 - shouldnt that all be mine then?

You mention "suck your returns into negative territory" - could you please explain?

Where exactly is this 9% taken out of? At the end of the year for taxes? From every trade being made?

>>355974
Oh dear. You don't think TD loans you that money out of the goodness of their heart? They will charge you interest every day on every dollar you borrow.

I strongly suggest you spend a little more time learning about margin trading before doing any more of it.

Indeed, I have to ask ... is there any particular reason you have a margin account at all?

>>355949
>>355966

Ok now I am very curious, which is in fact the norm? 8-9% and 1-2% would make a big difference to your bottom line. Is one of you full of it?

>>355989
Neither.
http://www.themargininvestor.com/margin-rate-comparison.html

>>356003

Hmmm so why the variance in margin rates? Do some brokerages offer big advantages that justify their substantial rates?

>>355966
>Interactive Brokers
don't you need 10k to start though?

>>355979
>reason for margin account
For more buying power. My $5.9K will take a long time to reach 25K on its own.

Do you not recommend margin then? My in-and-out play is solid, I just need clarification on other investment terminology and understanding.
>investopedia
Yes I know this but I find asking questions relevant to my situation helps me understand more clearly thab reading abstract definitions.

>>356024
>Do you not recommend margin then?
No, I do not recommend trading on margin. It encourages frequent trading, it's expensive, and VERY few people utilize the borrowing power profitably.

Also, what's the obsession with $25K?

>>356032
For day trading. That is my end goal. I hate only being allowed 3 trades per 5 days.

I keep my stocks for no longer than 5 minutes. Once a stock has hit my TA requirements is when I head in.
>margin accounts can be expensive
Can you please explain? Isnt it only expensive if you lose margin money on a trade?

Again, thank you for all the help iHaz. I miss the /econ days

Just get a mcjob, it will pay better than ANYTHING you can do with 6k. It's not hard to get 25k for a proper account (and really, you're gonna need more than 25k because you need a safety cushion for drawdowns).

>>356161
I already have a job. Not a bullshit McJob, but an actual office analyst job. That shit pays for my bills and rent, and food if Im lucky.

I need to make money from the stock market. I've perfected my system down over the past 6 months - now I just need the capital to get rid of the fucking 3 trade SEC restrictions.

>>355875

I just started with 4k, go for it. Are you trading options/futures? Might be more convenient than stocks on margin.

>>356058

I think he means if you borrow say $5K to buy $10k of stock xyz, which is largely the point of a margin account, you will be paying 8 or 9% interest on what you borrowed, compounded each day (i think?) which means your position better be profitable because that is an expensive interest rate and it can easily outweigh any money made if returns are lack luster. That 8 or 9% will amount to $400-450 dollars!!

I would still like an answer about why some brokerages charge so much more pretty please. Do those higher interest brokerages offer some advantage to warrant their margin rate?

Thanks.

>>356177
Holy shit are you fucking serious?

So if if say I make $40 off a trade after fees, I could potentially be down money from my margin account because I borrowed, shit let's say $7 grand?

>>356218

Whoa, sorry m8, no need to get snarky. It seemed like a simple question and I didn't want to give a mean, sarcastic answer.

>>356315
No no, you have it all wrong bud. I'm asking you.

Is that literally how it works? What if your trade is so like $20 off a $10000 margin? Does it take your$20 profit and whatever loan % remaining back out of your non-margin account?

I'm sorry if I came off abrasive, heh. Like I said I'm totally new at this margin stuff.

Bump for interest.


Is it typical for brokerages such as AmeriTrade and eTrade to charge 9-10% off margins?

What exactly does this mean?

If you use $7,000 from a margin account, does that mean your trade has to least make $700 profit off the trade to break even from using the margin money?

>>357295
>Is it typical for brokerages such as AmeriTrade and eTrade to charge 9-10% off margins?
Yes. Read the fucking thread. >>356003

>>357295
>If you use $7,000 from a margin account, does that mean your trade has to least make $700 profit off the trade to break even from using the margin money?
No. Yes. Maybe. Depends on how long you carry the margin.

The margin interest rate is stated as an annual rate, but is compounded daily and charged to your account periodically (usually monthly, but may vary). It's basically the equivalent of getting a cash advance on your credit card in order to buy stocks, albeit at a (perhaps) slightly lower interest rate.

>>356166
>6 months
>during a raging bull market
>perfect system

>>355949

>I won't tell you NOT to trade on margin, because I did it when I was younger too.

Yo iHaz, quick question time: how young did you start trading? How was the learning curve, did you learn from anyone/anything in particular?

/biz/ newb here, trying to familiarize myself with these things