The tag has no wiki summary.

learn more… | top users | synonyms

1
vote
1answer
49 views

When do I need to pay interest on my short sell position?

For example, if I deposited $3000 into the account, and I short sell $3000 worth of VXX(a non-dividend paying etf). Do I need to pay any interest on my short sell position in this case?
0
votes
3answers
149 views

Is 6% too high to trade stocks on margin?

Lets assume I understand the risk of trading on margin and that I can lose the money. My question is if 6% is too high? I do have dividend paying stocks that could almost cover the monthly interest ...
0
votes
1answer
33 views

Gold futures' margin

How is the margin for gold futures determined? Where exactly can I look to find the current margin (pls, state website)?
3
votes
1answer
43 views

Futures margin requirements, can more than the initial margin be used to open a contract

Futures margin requirements can be a low percentage in relation to the size of the futures contract. Sometimes, you are only putting down 3% or less to profit from the price appreciation/depreciate ...
4
votes
2answers
111 views

Is it bad to consolidate and pay off private student loans with margin from my brokerage account?

I have several private student loans that aren't eligible for debt forgiveness and with interest rates between 10-15%, for a total of about $30K. I think it would be easier to pay the loan down over ...
2
votes
2answers
345 views

How do brokers make money from margin accounts?

How do brokers make money when they lend customers money to trade on margin? Let's say someone deposits $30,000 into an account and is given power to purchase $60,000 worth of securities. The person ...
2
votes
2answers
93 views

How to calculate how far a shorted stock's price can rise before broker issues a margin call?

If I short AAPL at 500$, how much can the stock rise before I get a margin call? Does it depend on how much Cash/Equity in other stocks I hold in my margin account? I just thought that if margin ...
0
votes
1answer
59 views

Regulation T and Initial Margin Requirements: How to interpret the 50%?

I wanted to understand initial margin requirements in the Federal Reserve's Regulation T section of the code. I read an article in Investopedia on Regulation T requirements, but I still feel uneasy ...
1
vote
1answer
187 views

What does it mean when the broker does not have enough shares to short?

I recently opened a margin account at Questrade with 1000 dollars to see if I can learn anything about margin trading. Today, I'm trying to short sell 2 shares of XLU at a $40 limit price and it ...
0
votes
2answers
105 views

Understanding the T + 3 settlement days rule

If I: Buy X at time T Sell X at time T' where T' < T +3 Buy Y on T' with proceeds from sale of X. Cannot sell Y before T' +3. Ref:http://www.slideshare.net/mring33/using-java Slide 29 It ...
1
vote
1answer
118 views

How to calculate how far a stock price can drop before a broker would issue a margin call?

Let's say the margin requirement for a stock XYZ is 50%. The current price of XYZ is $150/share. Let us say I put in $100, and borrow $50 from the broker to buy a share. Typically, how far can the ...
-2
votes
1answer
115 views

Margin Calculations Question [closed]

An investor buys $8,000 worth of a stock priced at $40 per share using 50% initial margin. The broker charges 6% on the margin loan and requires a 30% maintenance margin. In one year the investor gets ...
-1
votes
3answers
62 views

Who gets the margin call when a bear ETF goes down

When I short the SPY, if it goes up, then I get a margin call based on broker's margin requirements. (Not sure if margin requirements are specified by SEC or individual broker, but that is another ...
2
votes
1answer
180 views

Calculating Daily Returns for Futures Contract

I am calculating daily returns for a position in a futures contract. I am a little stuck with margin and how to account for it. I specifically dont understand how return is calculated after Margin ...
-2
votes
1answer
95 views

Is the interest on money borrowed on margin in/for an RRSP considered tax deductible?

If I borrow cash in my margin trading account which happens to be an RRSP account, does the interest on that money become tax deductible from my income? I know if I put money in my RRSP from my salary ...
6
votes
2answers
217 views

How Does A Special Memorandum Account Work

I've noticed that a lot of brokerage firms mention Special Memorandum Accounts (SMA) within the context of calculating margin requirements for margin accounts. Can anybody explain or perhaps direct ...
4
votes
1answer
79 views

How do I maximise my returns when using margin in my brokerage account?

Suppose I have an investment account with $10,000 in it. I have a margin rate of 10% per year. For a total of $2.7 interest per day, or $1,000 per year. I can invest in a high risk ETF with returns ...
1
vote
2answers
145 views

What would the broker do about this naked call option?

Let's say there is a stock of ABC currently at $8, and I sell a (naked) call option on it, with a strike price of $10 and expiration in two months. Suppose my broker lets me do this if I have 50% of ...
0
votes
0answers
120 views

Can i start account for trading U.S commodity futures from india by remiting money from India

I want to trade in Comex/Nymex, & Cme futures so is it possible to open a trading account directly with a foreign broker in chicago from India?
6
votes
2answers
280 views

Do the proceeds from selling an option immediately convert to buying power in a margin account?

In a cash account, the proceeds from the sale of any security will be held until settlement; for options, this is effectively overnight. One can sell an option on one day, and then use the funds the ...
2
votes
2answers
101 views

Can i short securities in a normal(non-margin) account

When I take up a short position, I borrow stocks from my broker and sell them on the market. Does the broker charge interest for this? Also to do this, do I need a 'normal' account or a margin ...
0
votes
1answer
108 views

Futures initial margin and maintenance margin

I just a had a quick question about margin in a Futures contract. Suppose, that I have a Futures contract that requires an initial margin of $1000 and a maintenance margin of $500. Suppose that after ...
2
votes
1answer
205 views

Who is the issuer in a derivative contract?

In the case of a bond or a share, there is a bondholder or a shareholder on one side and a company issuing the security on the other side. In a derivative contract, which party can be named as the ...
3
votes
5answers
1k views

Investing in dividend-yielding stocks with money borrowed from margin account?

I am getting ready to invest some of my savings in a stock brokerage account. The well-known brokerages, e.g. ETrade, Ameritrade, etc, have relatively high margin interest rates for the level I am ...
4
votes
3answers
223 views

Margin when entered into a derivative contract

From Wikipedia In finance, a margin is collateral that the holder of a financial instrument has to deposit to cover some or all of the credit risk of their counterparty (most often their ...
3
votes
2answers
194 views

Can you write a put option without sufficient funds to meet the potential obligation?

When writing a put option does your account have to be funded so that if the buyer exercises the right to sell you can meet your obligation, or can you write the put option without the funds to meet ...
4
votes
1answer
374 views

Short-selling treasuries instead of borrowing on margin?

Let's say I have a diversified investment portfolio, and I wish to tap a relatively small amount of cash (less than 5% of the portfolio's value) without liquidating any of my positions. I could ...
8
votes
4answers
142 views

Other than being able to borrow to invest, how is a margin trading account different from a cash account?

Other than being able to borrow against one's portfolio value to purchase additional investments, how is a typical brokerage margin trading account different from a typical cash trading account? ...
3
votes
3answers
528 views

Does financing a portfolio on margin affect the variance of a portfolio?

For example, if the portfolio is financed with 50% margin, does it affect the portfolio variance?
5
votes
1answer
316 views

Understanding company income statements: What is a good profit margin that would make it worthwhile to invest?

I have been learning about how to read and understand a stock company's income statement and using those variables to determine the worth of the stock. My question is, what is a good profit margin for ...
11
votes
3answers
1k views

My account's been labeled as “day trader” and I got a big margin call. What should I do? What trades can I place in the blocked period?

HI I recently received a day trading margin call of $14,852.63 requirement. I do not have that much money. What should I do? Should I close my trades and take all cash out? The system labeled me as ...
5
votes
1answer
212 views

When entering a Futures contract, must the margin deposit be idle or can I profit from it?

Let's say I am trading in a Reg-T Margin account. When entering a Futures contract, a certain amount of cash is needed as collateral (usually 5%-15%). I'd like to see that collateral generate income ...
5
votes
1answer
272 views

What are the risks associated with leveraged trading accounts?

What is a leveraged account and why is it mandatory on some trading platforms to operate through leverage? Also, what are the associated risks? Could I end up losing more money than I invested?
3
votes
2answers
231 views

Rules for Broker Behavior with Covered Calls

When selling covered calls, there are a couple of things a broker could do if the stock has a sharp increase. Here's an example: Buy Stock: $100 Sell Call $120@1month: $1 Two days later, the stock ...