Question for any day traders

BrandontheGreat

BrandontheGreat

Links @ helpmyrank.com
Aug 24, 2008
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Just opened a margin account. Can any of you explain this:

There are also increased margin requirements when shorting low priced stocks. The minimum requirement is $2.50 per share on shorts, so if you short a stock trading under $2.50 a share you still will be held to the increased requirement of $2.50 per share. Stocks trading between $2.50 and $5 will be held to 100% requirement on shorts. Stocks above $5 per share will be held to a minimum requirement of $5 per share and then the regular short requirements thereafter.
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Thanks.
 


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If you short a stock on margin valued under $2.50 a share, you need to have a minimum of $2.50 per share in your account.

If you are shorting shares between $2.50 and $5, you need to have whatever the share price is x the number of shares you are shorting in your account.

If the price is over $5, you need to have $5 per share in your account.
 
I should add that if you cant figure that out, you should most likely not be shorting, or trading on margin.
 
qqbot said:
If you short a stock on margin valued under $2.50 a share, you need to have a minimum of $2.50 per share in your account.

If you are shorting shares between $2.50 and $5, you need to have whatever the share price is x the number of shares you are shorting in your account.

If the price is over $5, you need to have $5 per share in your account.
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Thanks.

For some reason I thought I was gonna get charged that amount per share.

:xomunch:
 
BrandontheGreat said:
Thanks.

For some reason I thought I was gonna get charged that amount per share.

:xomunch:
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you will when they "call" your margin, for non compliance.


DO NOT USE YOUR MARGIN ACCOUNT

You really need to figure out the mechanics of making money with your money, before you start fucking around with "their" money.
 
qqbot said:
If you short a stock on margin valued under $2.50 a share, you need to have a minimum of $2.50 per share in your account.

If you are shorting shares between $2.50 and $5, you need to have whatever the share price is x the number of shares you are shorting in your account.

If the price is over $5, you need to have $5 per share in your account.
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This is literally the most useful post I have ever read by anyone under the post count of 20. I had to scroll back up to make sure this was actually WickedFire.

:thumbsup:
 
It all depends on your style of trade. Margin is a tool that can be used to your advantage; it can also ruin you. Using 50% of your margin account to buy bluechip stocks may work , but the interest fees may hurt. Shorting stocks has the potential for unlimited loss and hence the need for margin to offset the initial losses should the stock gap higher. If a small stock gaps really high on some good overnight news neither you or the broker can cover the position. The margin requirement is determined by the likelihood of such an event occurring. An alternative to shorting that bypasses these problems is buying put options.
 
bitfiend said:
It all depends on your style of trade. Margin is a tool that can be used to your advantage; it can also ruin you. Using 50% of your margin account to buy bluechip stocks may work , but the interest fees may hurt. Shorting stocks has the potential for unlimited loss and hence the need for margin to offset the initial losses should the stock gap higher. If a small stock gaps really high on some good overnight news neither you or the broker can cover the position. The margin requirement is determined by the likelihood of such an event occurring. An alternative to shorting that bypasses these problems is buying put options.
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Buying derivatives is an even shittier idea for someone new to trading.
 
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