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 day trader. I have only $6900 in my money. They said I can borrow up to 100% of my equity. That is why I borrowed. Is there anything I should do? Will they take my $6900 as well?

UPDATE: I obtained the cash they needed for margin call. I want to sell a stock which I bought on margin as it has reached 80% of my target. The brokerage said my account will take a while (1 week) to be okay. I want to get out of this position. Is it okay to sell the stock in the time period of the next 7 days when my account is getting back to normal status?

  • I like to ask one of my own, what if you have Margin account but do not trade with Margin money only cash balance. Would you still be label with Daytrade if you proceed to buy/sell more than 4 times in 5 business days?
    – user17488
    Jun 11 '14 at 22:34
  • 2
    @Sidney Use the Ask question link at the top right of the page to ask a new question. Jun 12 '14 at 0:37
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    "They said I can"... bash my face into the wall, so I did!
    – RonJohn
    Jul 3 '19 at 15:37

"The SEC considers a day trade to be any trade that is opened and closed within the same trading day, and considers a day trader to be any trader that completes 4 or more day trades within 5 business days."

If so they would label you day trader and in the US you are required to have at least $25K in your account. Maybe that's why they require you to add more money to your account?

See more at Day trading restriction on US stocks and Wikipedia - Pattern day trader.

  • So what should I do now?
    – user2494
    Feb 20 '11 at 21:55
  • call the broker, he can give you the exact answer to what happened
    – Vitalik
    Feb 24 '11 at 5:20

I assume that whatever you're holding has lost a considerable amount of its value then? What sort of instrument are we talking about?

If the margin call is 14k on something you borrowed against the 6900 you're a bit more leveraged than "just" another 100%. The trading company you're using should be able to tell you exactly what happens if you can't cover the margin call, but my hunch is that selling and taking the cash out ceased to be an option roughly at the time they issued the margin call. Being labelled as a day trader or not most likely did not have anything to do with that margin call - they're normally issued when one or more of your leveraged trades tank and you don't have enough money in the account to cover the shortfall.

Not trying to sound patronising but the fact that you needed to ask this question suggests to me that you shouldn't have traded with borrowed money in the first place.

  • And is possibly in a horrifying amount of difficulty...
    – Turukawa
    Feb 20 '11 at 16:36
  • Hmm so can I unwind my trades?
    – user2494
    Feb 20 '11 at 21:54
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    Re: "Being labelled as a day trader or not most likely did not have anything to do with that margin call" ... actually, the other answer seems to indicate this is the case. Feb 20 '11 at 22:06
  • Actually whatever I held in margin went up by a great deal in 2 days. Actually there were 3 calls. DT, EM and RM. EM and RM I have taken care of now. The DT call is the most serious. I seem to owe $2.5k
    – user2494
    Feb 21 '11 at 0:56

You need to contact the trading company and ask them what's going on. If it's simply a matter of needing to add more cash because you are now classified as a day trader, then call them, ask them what you need to do to not be considered a day trader, and do that. It would likely consist of not trading for a week and then trading less than you were going forward to avoid getting classified as a day trader again. That would be the easy problem to solve, so I hope that's right.


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