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If you take out $100k, your position in VTI cannot drop below $133k (cannot drop more than 55%). Maintenance margin is usually 25%. This means that you cannot owe more than 75% your account's worth. If you borrow $100k and your VTI position is worth $300k, you owe 33% of your account's worth. If your position in VTI goes down in value to $133k, you owe 75% ...


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In the US, options settle in one business day and equities settle in two. This isn't a problem if you have a margin account since the broker effectively lends you the money but without a borrow fee. The PDT rule was implemented after the internet bubble during which many people lost a lot of money day trading. Its purpose is to disincentivize people from ...


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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 or fully paid marginable securities. In your case, you are taking a margin loan of $100k and your equity reduces to $200k. If the margin maintenance requirement ...


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Counterparty risk Regarding your second sub-question (IMHO they're different enough to put them as separate questions), counterparty risk is a thing. For exchange traded securities you should be generally protected from that, but for OTC trades the insolvency of some party in the settlement (not necessarily the buyer/seller, it could be also some bank in the ...


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