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Why didn't a margin call prevent me from losing more than my initial investment when buying on margin?

Buying on margin refers to buying of securities with cash borrowed from a broker with securities acting as collateral, covering a portion of the risk of the position. This use of margin magnifies the ...
Bob Baerker's user avatar
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5 votes
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Can I buy index funds without margin and own it like a stock?

Yes, but you'll want to trade an ETF or mutual fund instead of a CFD. See if your broker offers ETFs on that index (I presume the S&P 500) instead of CFDs. If not, look for a more traditional ...
D Stanley's user avatar
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4 votes
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Trading Places (1983 film): Is it really possible for futures exchanges to seize their members' assets?

This question is sort of answered in the podcast (and worth a listen): NPR Planet Money Episode 471: The Eddie Murphy Rule (July 9, 2013). From the transcript: [Host] SMITH: And this dramatic, crazy, ...
Morrison Chang's user avatar
4 votes
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How does short margin works internally?

Your question is based on a lack of understanding of margin (I'm assuming that you're talking about the U.S.). Let's start with the margin requirement. If you want to buy shares on margin, under ...
Bob Baerker's user avatar
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4 votes
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Robinhood Reg T Call, please explain

Regulation T requires that at least 50% of the money you are trading with be your money. If you fail to meet this requirement, stocks will be sold to both reduce what you're borrowing and increase ...
David Schwartz's user avatar
2 votes

Does a one stock leveraged ETF behave like margin?

For example a long leveraged etf may actually go down, even though the stocks it tracks go up, because they use complicated financial instruments to achieve leverage. Typically, such a discrepancy is ...
nanoman's user avatar
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2 votes

Is there an exact percentage drop for a stock for it to trigger a margin call?

Traditionally, Reg T margin for long purchases is 50% and the margin maintenance requirement (MMR) is 25%. Brokers can require more margin and some who previously were at the Reg T limit raised it ...
Bob Baerker's user avatar
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2 votes
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Zero cash buying power, what would margin maintenance be?

Fully paid marginable securities can be used to buy additional securities on margin. The formula for this is: [ (Securities Value) x Margin % ] / [ (100% - Margin %) ] In the US, Reg T initial margin ...
Bob Baerker's user avatar
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2 votes
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What happens if a futures exchange increases margin requirements while I have open positions?

In a perfect world, a broker would notify you that the margin requirement and maintenance requirement are going to be raised, giving you time to increase your margin via adding additional cash or ...
Bob Baerker's user avatar
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2 votes

Margin call and shorting, depends on cash or both cash and held security?

Is this threshold dependent on the total value of your held stock + cash or just available cash? It depends on the equity in your account, which is based on the market value of all securities and ...
0xFEE1DEAD's user avatar
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2 votes

How to work out acceptable amount of margin loan?

I wonder, is there is a safe margin loan, Loan Value Ratio (LVR) to avoid a margin call? There are three factors involved in determining at what price you receive a margin call: Initial margin ...
Bob Baerker's user avatar
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1 vote

Margin: Is my math correct?

This answer is the same as what Axiomatic Nexus explained but just in a somewhat different fashion. Reg T margin is 50% so if your broker's rate was the same, you could buy $300k of stocks with cash ...
Bob Baerker's user avatar
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1 vote
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How does maintainance margin work when withdrawing money on margin?

For non Pattern Day Traders, IBKR has an initial margin of 50% and a maintenance margin requirement (MMR) of 30%. Their maintenance margin requirement is 30% of the stock value or $2,000, whichever is ...
Bob Baerker's user avatar
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1 vote

Can a broker liquidate your position after market hours?

Any respectable broker will offer after hours trading. Some require that you request that ability (a formality). Then you can close the position. If the value of your account drops below the ...
Bob Baerker's user avatar
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1 vote

Questions about Margin in the Futures

Once you take a contract position, you can win or lose generally an infinite amount of money. The price you pay to get in to the contract has nothing to do with anything. Once you are in the ...
Fattie's user avatar
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1 vote

Will I receive an RT call or am I safe?

Standard Reg T margin is 50% so the requirement for shorting a stock with a market value of $1,554 could be $777. Why did I say could be? Stocks below $5 are not marginable Leveraged ETFs have a ...
Bob Baerker's user avatar
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1 vote

Margin call/maintenance question

Seems like an unfinished question... A margin call is a margin call. You either meet it or your broker will do whatever is necessary to bring your account into compliance. FWIW, 3 margin ...
Bob Baerker's user avatar
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1 vote

Why is maintenance margin at 50% if initial margin is at 100%?

I'm not familiar with your broker, with the security you mentioned, your currency or your locale so this is a U.S. centric answer. If you buy a security such as a stock, option or ETF with 100% cash (...
Bob Baerker's user avatar
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1 vote

How do futures affect my maintenance margin requirements in my margin?

Since I'm not familiar with the E-Mini, I can't solve this with the shortcut formulas such as is done in a combined long/short equity account which I am familiar with. You could then set up a ...
Bob Baerker's user avatar
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1 vote

Can a broker make it appear they have executed a 'buy to close' trade but in actual fact they simply have taken your position?

If you wrote a call option, and the underlying spiked up creating a margin call - which was not filled, can your broker make it appear that they executed a 'buy to cover' to close your position but in ...
Bob Baerker's user avatar
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1 vote
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Maintenance margin for fixed collateral

There are 6 basic synthetic positions relating to combinations of put options, call options and their underlying stock in accordance to the Synthetic Triangle: Synthetic Long Stock = Long Call + ...
Bob Baerker's user avatar
  • 76.8k
1 vote

How to work out acceptable amount of margin loan?

You reference the Great Recession specifically, which was the 2007-2009 recession. The bear market of 2007-2009 lasted 1.3 years and sent the S&P 500 down by 50.9%. - investopedia, A History ...
Lawrence's user avatar
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