A margin account only requires $2,000-5,000 in your stock account with most discount brokers( with $25,000..they let you trade 3x per week....so you don't have wait for settlement on all trades...Only requires signing a Margin Agreement..and with stocks over a certain $$ amount you can borrow money against your settled funds ..up to 100% if the stock is a certain price level....( and this<borrowing to buy> excludes penny stocks)....but nonetheless you can trade 3X per week which will allow many of you to buy or sell ...maximizing your profit opportunities...and gap your losses.....
If you have $25,000+ or more in account value(stock and cash) you can be a true day trade w/ some discount brokers.......and buy and sell
Have A Great Weekend to All !!!!
***Next Week RSHN and CWFG..... and day trade the hell out of USXP *****due your homework****
Posted by Johnwayne on :
Do brokerages allow me to open seperate accounts, all under my name? This would allow me more flexibility to day trade without haveing to wait for settled funds all of the time. What is the penalty for selling unsettled stocks before the funds are settled?
Posted by rkh2005 on :
I think Scottrade allows 6 accounts per customer??? Is that right?
Posted by AgentGPF on :
Funds settle not stocks. If you buy a stock you own it, normally funds will be withheld by the broker automagically when you sell a stock. If you sell something on the same day you bought it, you can be penalized via a day trader call which will cost you some cash and at worst freeze your account for a given window of time.
Posted by Johnwayne on :
Heck if I split my money six ways that would leave about $1 per account! I just have trouble keeping my money separated. But heck I would confuse the accounts too! No wonder I can't make any money!!! Thanks for the info rkh and advice ohio trader!
Posted by QBID'n on :
Risk tolerance varies amongst each of us so read up on Marginal Accounts first.
Found this also:
Margin Accounts
A margin account uses securities as collateral for a loan to buy additional securities. A margin account can also be used as collateral against a personal loan.
A margin account is only appropriate for investors with high levels of risk tolerance, as the value of the securities in the account may fluctuate widely with business conditions. If the value of the securities in the account falls below a predetermined level, the account may be called and you may be liable for paying off any outstanding liabilities.
Posted by Johnwayne on :
I know just enough about margins to know I better not take that risk yet. I'm too green. For others with more experience than I it may be the way to go. Good luck to all.
Posted by rkh2005 on :
Also, with Scottrade, you can link accounts together so that if you open up to one, you'll see the details of them all.
Posted by roozers42 on :
I talked with a Scottrade broker today and said that with the margin account or the 25,000 you don't have to worry about settled funds. I think you're right, Ohio-trader...I will only have to deposit a few more funds - and I don't have to use them. I don't think there is any way I can trade right now to EITHER maximize my gains OR minimize my losses. If I need to sell, I need to sell!
thanks for the post!
Posted by lilpennypincher on :
All of this sounds real nice but, if you do not have experience with trading you can also lose your shirt. AS WITH ANY KIND OF TRADING. ALSO.....You CAN NOT (in a margin account) Daytrade more than *3* times over a five day (business day) period. There are also margin calls to deal with..
It is nice to buy a stock and sell it the next day......Not having to worry about funds settling. Daytrading accounts are not all they seem to be as well. Once you are considered a "Pattern Day Trader" It can get quite messy in your account, unless you know what you are doing.
Do your homework on all of these before you jump into anything...
Posted by Jelly on :
Yep, thanks Lil, I was going to post about this.
Although you can "day trade" as much as you want IF you have 25K in your account.
I'm actually a patterned day trader, from flipping the same stock too many times. Now when I sell, my funds don't clear til tomorrow UNLESS I flip it the same day. Hence me having 3 accounts, LOL
Posted by JimSC on :
I have read a lot of books about stock trading. My conclusion is: staying away from margin account -- it could kill you. Trading low-priced stocks at 52-week low, under the MMs' accumulation is the best form of margin.
Posted by BuyTex on :
sounds wise to me, Jim...
Posted by Johnwayne on :
FOR NEWBIES LIKE MYSELF I am going to post information for any newbies such as myself. I am doing this so that I can, for once, hopefully help maybe one person in return for all of the help I have received here. Let's say I buy into stock ABC on Monday with settled funds. I decide to sell ABC on Tuesday, making the funds I put into ABC "unsettled" until Friday open. ButI decide to invest these same unsettled funds in XYZ stock on Wednesday. I am stuck in XYZ until the funds settle at Monday open. This is how basic trading works. If everybody knows this already than it won't hurt newbies such as myself to read it again.
And if I am incorrect please let me know and I will correct the post.
Posted by rkh2005 on :
quote:Originally posted by roozers42: I talked with a Scottrade broker today and said that with the margin account or the 25,000 you don't have to worry about settled funds. I think you're right, Ohio-trader...I will only have to deposit a few more funds - and I don't have to use them. I don't think there is any way I can trade right now to EITHER maximize my gains OR minimize my losses. If I need to sell, I need to sell!
thanks for the post!
wait, are you saying that if a Scottrade account, even an IRA, is worth over $25,000 then the 3 day settlement no longer applies?
Posted by Jelly on :
Yep John.
Posted by OhhhYeah on :
lol.. kinda irresponsible recommending a margin account for penny stocks especially if a new investor happened to buy into the thought. Margin accounts are for more experienced investors who understand what they are doing and like to take large risks on less risky stocks. Taking such a large risk on already risky penny stocks is almost stupid.. You are betting money you dont have.. if you do have it then you dont need a margin account. Remember this board is for stocks under .10.
Posted by lilpennypincher on :
Yes, You now have to allow the XYZ to settle. Margin is the best way to go for trading one day to the next.
DON'T USE YOUR MARGIN. Just use the money you have in your account.
Posted by pay up on :
quote:Originally posted by Johnwayne: FOR NEWBIES LIKE MYSELF I am going to post information for any newbies such as myself. I am doing this so that I can, for once, hopefully help maybe one person in return for all of the help I have received here. Let's say I buy into stock ABC on Monday with settled funds. I decide to sell ABC on Tuesday, making the funds I put into ABC "unsettled" until Friday open. ButI decide to invest these same unsettled funds in XYZ stock on Wednesday. I am stuck in XYZ until the funds settle at Monday open. This is how basic trading works. If everybody knows this already than it won't hurt newbies such as myself to read it again.
And if I am incorrect please let me know and I will correct the post.
I think you are incorrect. If you bought ABC on Monday and sold ABC on Tues. you still settle on that sale on Fri. no matter if you buy another stock or not. But if you buy XYZ in the mean time you can't sell it until ABC has settled on Fri. At least that's what ETrade has done with me.
Posted by OhhhYeah on :
PS.. on scottrade I always reinvest unsettles funds with no issue
Posted by BuyTex on :
quote:Originally posted by OhhhYeah: PS.. on scottrade I always reinvest unsettles funds with no issue
no issue unless you *sell* it while still unsettled...
Posted by BuyTex on :
quote:Originally posted by lilpennypincher: Yes, You now have to allow the XYZ to settle. Margin is the best way to go for trading one day to the next.
DON'T USE YOUR MARGIN. Just use the money you have in your account.
excellent post--hope folks are paying attention...
Posted by pay up on :
You can buy on unsettled funds but you can't sell that purchase till you have actually paid for the shares, which happens 3 days after the 1st stock sale.
Posted by rkh2005 on :
quote:Originally posted by lilpennypincher: Yes, You now have to allow the XYZ to settle. Margin is the best way to go for trading one day to the next.
DON'T USE YOUR MARGIN. Just use the money you have in your account.
Here's the thing. I have $10,000 in my IRA account right now and trade cash only, so the rule still applies for me. I'm hoping that my account will get to $25,000 within a couple of months.
So you're saying that when my account reaches $25,000, the funds won't have to settle, but the XYZ will? By the XYZ settling, what exactly do you mean and how long will it take? How long will it then take for me to sell another security I bought with those funds?
I'm just figuring this out for my own benefit when my account gets high enough. Sorry for all of the questions.
Posted by SincereX13 on :
I used 2K of my own money to open a Scottrade account (not on margin). I have never had an issue with unsettled funds and have made multiple trades in one day. I'm not a daytrader per se but I've not encountered any problems of any kind thus far. Pennies are a gamble... would you borrow 50K from the bank and then go to Vegas to play blackjack?
Posted by rkh2005 on :
quote:Originally posted by OhhhYeah: PS.. on scottrade I always reinvest unsettles funds with no issue
Yeah, any Scottrade user, including myself, can do that. It's a great advantage.
Posted by Johnwayne on :
pay up - so the date of the second purchase in xyz is irrelevant? God help me if I ever got involved in something as complex as margin trading!!!!
Posted by pay up on :
It's not the brokerage firm that you use it's a trade rule that applies no matter what.
Posted by 7 of 9 on :
losers
a real woman trades with her own profits
Posted by ohio_trader on :
Only requires signing a Margin Agreement..and with stocks over a certain $$ amount you can borrow money against your settled funds ..up to 100% if the stock is a certain price level....( and this<borrowing to buy> excludes penny stocks)....
you cannot borrow on margin for penny stocks !!
Posted by pay up on :
I'm new at this too and I think we try to rush things. Those who make several trades a day have built up funds over time. So they can do this. Be patient and learn. Get a little gain at a time and soon you will build up your account. Some of these stocks you may need to hold for several months before it goes up. I'm sure there are not as many people on here making the big money everyday as you think. But then some days they make thousands.
Posted by lilpennypincher on :
quote:Originally posted by pay up: It's not the brokerage firm that you use it's a trade rule that applies no matter what.
Correct
Now if you purchase ABC on Monday with CASH, You sell it on tues and pruchase XYZ. YOU MUST wait 3 days for those funds to settle before you can sell it. NO IF ANDS OR BUTS......In a cash account.
I would never suggest Using your margin Priviliges for starting out EVER!
Just use the margin FOR buying and selling the next day.
and if you are using unsettled funds and buying and selling...YOU WILL GET CAUGHT! They will slap your hand the first time and then suspend your account. IT will happen.
Please, everyone Do your homework on this...It's not a game. Might play like one but it's NOT!
Posted by Jelly on :
quote:Originally posted by 7 of 9: losers
a real woman trades with her own profits
What's this all about? Besides rude.
Posted by pay up on :
Jelly, you tell em. I totally agree with you. Remember, the one that laughs last laughs the hardest.
Posted by mr money on :
If you have more than 25k in equity in your account and you sign a margin agreement. You can buy and sell at will. I personally do about 10 to 25 daytrades everyday.
Posted by Jelly on :
Pay up,
I just don't get the attitude of you're better than someone else. Everyone has to learn some where.
Some just need to get over themselves, or move on.
off my soap box...
Posted by pay up on :
Jelly, The ones who think they are better end up being the unliked people with no real friends. Friends are better than money anyday.
Posted by Rich735 on :
I have learned so much from you all.
It is funny, I just got busted Monday for flipping USXP. I traded four times Turning $3200 into $6000. BUT ETRADE caught me and put me on a 90 day restriction. I have a cash account.
So I guess I can buy a stock but can't sell it until the next day? Is that right? Or can I buy a stock,sell it same day,and then wait 3 days?
Thanks anyone!!
Posted by OhhhYeah on :
I learned something new today. I have done the same thing several times and have not been "caught" yet from Scottrade. I never knew it was not allowed..
Posted by pay up on :
Rich, Can't help you there.
Posted by Rich735 on :
Maybe Lil?
Posted by pay up on :
quote:Originally posted by OhhhYeah: I learned something new today. I have done the same thing several times and have not been "caught" yet from Scottrade. I never knew it was not allowed..
What did you do? Did you have cash in your account?
Posted by lilpennypincher on :
quote:Originally posted by Rich735: I have learned so much from you all.
It is funny, I just got busted Monday for flipping USXP. I traded four times Turning $3200 into $6000. BUT ETRADE caught me and put me on a 90 day restriction. I have a cash account.
So I guess I can buy a stock but can't sell it until the next day? Is that right? Or can I buy a stock,sell it same day,and then wait 3 days?
Thanks anyone!!
IN a CASH account. YOU MUST WAIT 3 DAYS for funds to settle.
Apply for margin if you want to flip. BUt then you can only DAYTRADE (buy and sell the same stock in ONE day) 3 times over a five (business day) period. You can buy a stock one day and sell it the next as many times as you'd like.
Now to answer the cash part AGAIN...
Now if you purchase ABC on Monday with CASH, You sell it on tues and pruchase XYZ. YOU MUST wait 3 days for those funds to settle before you can sell it. NO IF ANDS OR BUTS......In a cash account.
I would never suggest Using your margin Priviliges for starting out EVER!
Just use the margin FOR buying and selling the next day.
and if you are using unsettled funds and buying and selling...YOU WILL GET CAUGHT! They will slap your hand the first time and then suspend your account. IT will happen.
Please, everyone Do your homework on this...It's not a game. Might play like one but it's NOT!
Now, I'm going to play wheel of fortune with Jelly and make thousands..........LMAO
Posted by OhhhYeah on :
NO.. I bought and sold with unsettled funds.. the site lets you but apparhently it is against the rules...
Posted by pay up on :
Maybe your Broker
Posted by whb11 on :
I'm pretty sure your second thought is correct.. buy a stock,sell it same day,and then wait 3 days. in a bit further detail, you can buy again the same day, but you can't sell what you bought until the first sale settles.. unless you have enough settled funds already to cover it..
guess it's time for you to open a new account, huh.. 90 days is like eternity here.
Posted by Jelly on :
Rich, open another account even with the same company and transfer your funds over. The 90 day restriction will KILL you LOL.
Yes you cannot flip the same stock more than 3 or 4 times, unless you have 25K
You cannot flip a stock with unsettled funds.
You are in the boat that you can now buy a stock and sell it, but when you sell it, you can't use the funds til they clear.
Read the fine print everyone. There are alot of rules that are important. Anyone that has PM'ed me for help, that is one of the first things I tell them, the flip rules, daytrade rules, etc.
Posted by Jelly on :
People, you cannot daytrade more than 3 or 4 times in a 5 business day period either. Read, read, read. (of course unless you have 25K)
Posted by lilpennypincher on :
Ok one more thing. In a cash account, You can buy and sell if you have enough FREE CASH sitting in your account to cover the trades.
Now, Ready to spin Jellz?
Posted by rkh2005 on :
quote:Originally posted by whb11: .. unless you have enough settled funds already to cover it..
OHHHHHH, is that how that always works, even if the account is above $25,000?
Posted by hurricanematt on :
Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts. For more information, you can read the NASD's Notice to Members and the New York Stock Exchange's Information Memo.
Posted by Johnwayne on :
Lil- At issue is whether you are waiting for the ABC sell funds to settle or the XYZ purchase funds to settle.
Posted by hurricanematt on :
On February 27, 2001, the Securities and Exchange Commission (SEC) approved amendments to National Association of Securities Dealers, Inc. (NASD®) Rule 2520 relating to margin requirements for day traders (the "amendments"). The amendments become effective on September 28, 2001 and are substantially similar to amendments by the New York Stock Exchange (NYSE) to its margin rules
Posted by pay up on :
This buying and setteling all depends on your having cash in your account or not. If you buy ABC and sell it, it doesn't settle for 3 days. If you have other case in your account and you buy another stock for less than that amount then you bought it with settled funds and can sell it whenever you want.
Posted by rkh2005 on :
Got it. Thanks.
Posted by lilpennypincher on :
there ya go!
now lock this thread. It's a mess. LMAO!
Posted by whb11 on :
i just got my choicetrade account set up.. i tried searching through all the old threads that had 'margin' in it, but couldn't find what i was looking for.. and also tried looking through choice's website..
anybody know the minimum to get a margin account through them? i definately wouldn't be trading on margin.. i just want to have the freedom to be able to have a buy-one-day, sell-next-day pattern and not be bothered by those pesky settling times.
Posted by Graham Charitable Trust on :
so the margin loan EXCLUDES penny stocks?? Just tring to make sure, thank you
Posted by Machiavelli on :
I don't recommend margin accounts for anyone especially beginner's... it's a road to disaster for beginner's... margin calls are not fun... especially if you short stocks and such... but if you do open a margin account know what your getting into .. i rather stick to cash...
Posted by Machiavelli on :
quote:Originally posted by whb11: i just got my choicetrade account set up.. i tried searching through all the old threads that had 'margin' in it, but couldn't find what i was looking for.. and also tried looking through choice's website..
anybody know the minimum to get a margin account through them? i definately wouldn't be trading on margin.. i just want to have the freedom to be able to have a buy-one-day, sell-next-day pattern and not be bothered by those pesky settling times.
I got this from the site:
Margin Accounts that do not engage in day trading: If you do not intend to engage in day trading, you may deposit as little as $2,000 initially.
Day Trading Accounts: There is a $25,000 initial minimum required to establish a ChoiceTrade account. In addition to the minimum, in order to open a ChoiceTrade account, your account must be approved as a margin account and you must have an annual income of at least $35,000 or a liquid net worth of at least $75,000. After your account is established, a $25,000 minimum account balance will also be required. Accounts that fall below the required minimum will be subject to certain restrictions, and additional funds may be required. In addition to these requirements, it is strongly recommended, but not required, that you have at least one year of online trading experience and at least one month of live trading experience on a direct access platform before opening a ChoiceTrade account.
Posted by whb11 on :
Thanks, Mach. I deposited 525.. Maybe I'll wait and see if I can grow my account up to that much, and then apply. Or, grow up my money till I have enough to make a 2,000 initial deposit on a new account.
I'm not planning on day trading, per se.. I just want the freedom to flip more often, which I think would be ok with them. No rush though, I don't mind taking my time. Just like to know my options. Thanks again!
Posted by roozers42 on :
Please tell me if my logic is flawed....
If you cannot buy pennies on margin, then it seems to me that much of the risk is diminished. If this is the case, I'd rather have an account that lets me day trade three times a week per stock rather than a regular cash account where I have to wait three days.
Posted by BuyTex on :
yes, flawed...you *are* describing a regular cash account, with which you may make 3 round trips in a rolling 5-day period (ie, *not* "that week*: it does *not* start over each Monday); furthermore, you will run into free-ride provisions if you sell a stock without settled funds to cover...
margin account lets you borrow from broker to avoid using unsettled funds.
I sincerely hope we craft an explanation that clears this up; then we can link to it...
anyone with remaining questions, please post em here...
Posted by deadmango on :
Is the 3 day wait for unsettled funds 3 business days or do weekends count too? Rookie question but I wasn't sure. Thanks.
Posted by BuyTex on :
![[Smile]](smile.gif)
It's a great advantage.