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Yes, and considering the time you have spent on it and the risk you have incurred, one is better off getting a min wage job then do trading with 1k.
They do offer margin accounts, I don't consider myself an experienced investor so, I am afraid to use allot of margin, but with 10k and another 20k in margin funds. You buy at 100 pier share stock and sell it at $101, you made $279 dollars with commissions and interest on margin. That trade can happen in one day, so if one manages to do this 1% return every day, get 1% return a day, and the have the time to do it...
Yes, and considering the time you have spent on it ...
The time who has spent on what?
Quote:
Originally Posted by DPolo
and the risk you have incurred, ...
The risk who has incurred on what?
Quote:
Originally Posted by DPolo
one is better off getting a min wage job then do trading with 1k. ...
One is also better off just buying a big screen TV than getting a commission to sell a used car.
I would be better off shoveling the snow than getting on a bus to Chicago.
I can think of all kinds of random associations like that. Don't get me started.
I think you should be very well off financially and an experienced investor before you even think about doing anything margin.
Everyone should have a margin account if they are able to get approved.
Think of a margin account like a credit card. You don't have to spend your entire credit line. It gives you the ability to be flexible with purchases, you don't have to run to the bank, get cash then go back to the store and by then maybe the item you wanted is no longer available.
So let's do an example for stocks.
1) Bob has $25,000, but doesn't have a margin account. He decides to buy $25,000 in AAPL. The stock isn't going anywhere, but then his friend tells him about a great buying opportunity for UA. Bob sells AAPL, but now has to wait around 3 business days for the funds to settle before he can buy UA. Fast forward 3 days later and now UA is up 10% and he missed the opportunity, meanwhile AAPL is now up from the time he sold it as well too.
2) Rob has $25,000 and has a margin account. He also bought $25,000 in AAPL at the same time as Bob. He is mutual friends with the guy who recommended UA as a buy right now stock. Rob thought everything made sense, so he sold his shares in AAPL and bought $25,000 in UA 10 seconds later. He was able to do this because he had a margin account, yet he wasn't over-extending himself.
My point, just because a margin account gives you the ability to buy say 3-4x whatever your account, doesn't mean you have to! Use the margin account so you can freely buy and sell without having to wait for your funds to settle, just don't go over your account.
Everyone should have a margin account if they are able to get approved.
Think of a margin account like a credit card. You don't have to spend your entire credit line. It gives you the ability to be flexible with purchases, you don't have to run to the bank, get cash then go back to the store and by then maybe the item you wanted is no longer available.
So let's do an example for stocks.
1) Bob has $25,000, but doesn't have a margin account. He decides to buy $25,000 in AAPL. The stock isn't going anywhere, but then his friend tells him about a great buying opportunity for UA. Bob sells AAPL, but now has to wait around 3 business days for the funds to settle before he can buy UA. Fast forward 3 days later and now UA is up 10% and he missed the opportunity, meanwhile AAPL is now up from the time he sold it as well too.
2) Rob has $25,000 and has a margin account. He also bought $25,000 in AAPL at the same time as Bob. He is mutual friends with the guy who recommended UA as a buy right now stock. Rob thought everything made sense, so he sold his shares in AAPL and bought $25,000 in UA 10 seconds later. He was able to do this because he had a margin account, yet he wasn't over-extending himself.
My point, just because a margin account gives you the ability to buy say 3-4x whatever your account, doesn't mean you have to! Use the margin account so you can freely buy and sell without having to wait for your funds to settle, just don't go over your account.
You don't have to wait for a sell to settle prior to buying another position. Payment for the purchase wouldn't be due until it's settlement date. I'm not aware of an approval process for our clients when opening a margin account, it's actually a default on all account types that are allowed to have it
You don't have to wait for a sell to settle prior to buying another position. Payment for the purchase wouldn't be due until it's settlement date. I'm not aware of an approval process for our clients when opening a margin account, it's actually a default on all account types that are allowed to have it
What brokerage are you with? I've been with Ameritrade, Etrade, Scottrade, Charles Schwab, TradeKing and they all have an approval process for margin accounts. It wouldn't make sense for them not to, that would be like giving free credit cards to anyone. I have a lot of friends who can't get approved for margin accounts, so that's why I'm asking, they would love to be able to do what I was saying above. Right now, say they sell AAPL, they have to wait 3 business days for the funds to settle before they can use that money to buy again.
What brokerage are you with? I've been with Ameritrade, Etrade, Scottrade, Charles Schwab, TradeKing and they all have an approval process for margin accounts. It wouldn't make sense for them not to, that would be like giving free credit cards to anyone. I have a lot of friends who can't get approved for margin accounts, so that's why I'm asking, they would love to be able to do what I was saying above. Right now, say they sell AAPL, they have to wait 3 business days for the funds to settle before they can use that money to buy again.
I don't have to wait for funds to settle to buy in Etrade. I have to wait for them to settle to withdraw the money, but not make another purchase.
You can buy with unsettled funds. A "free ride" occurs when you SELL something that you haven't yet paid for (because the purchase hasn't yet settled).
There are no free riding issues in margin accounts, which is why they're useful, even if you don't purchase more than you have in cash.
What brokerage are you with? I've been with Ameritrade, Etrade, Scottrade, Charles Schwab, TradeKing and they all have an approval process for margin accounts. It wouldn't make sense for them not to, that would be like giving free credit cards to anyone. I have a lot of friends who can't get approved for margin accounts, so that's why I'm asking, they would love to be able to do what I was saying above. Right now, say they sell AAPL, they have to wait 3 business days for the funds to settle before they can use that money to buy again.
I work for a major firm and it would not be anything like giving out credit cards. A margin account is secured with collateral and is limited in terms of credit. We do not run credit reports on clients and there is not an approval process specifically for margin approval.
If those online places block you from selling and buying the same day it's a company policy not industry. A client has trade date +3 days to pay for a trade in most cases and if not paid for you can request an extension a get an additional 1-2 weeks to pay.
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