posted
I was wondering if anyone could help me with something. I'm a newbie and have been trading penny stocks for a little over a month now. I currently use scottrade and it works pretty good. I can use unsettled funds to buy anything as long as I don't turn around and sell it before it settles. The downside is though it costs me $12 + .05% for .ob stocks and $22 + .05% for .pk stocks. Does anyone have any advice on if I should switch my portfolio to a different broker to save on transaction fees? I would still like to be able to use unsettled funds though since I don't have tons of cash. Thanks for your help!
Posts: 254 | From: Indiana | Registered: Jan 2004
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posted
Ameritrade won't let you use margin to buy pink or otcbb. Get the margin so you won't have to wait three days to use unsettled funds.
DONT EVER USE MARGIN UNTIL YOU UNDERSTAND FULLY HOW IT WORKS. Its worse then a credit card. Any broker can sell all or some of your portfoilio when ever they want to cover your margin.
This is usualy done if you use margin to buy a stock and then it drops a little. The broker can sell your stock with out your permission to cover their margin. You would then be liable for anything else thats not covered. They usually will give you a call saying that you need to deposit money before they sell it, but they don't have to call you. NEVER USE MARGIN UNTIL YOU FULLY UNDERSTAND HOW IT WORKS.
I have margin so I won't have to wait three days to recover unsettled funds, but I have never used margin to buy stocks and I never will!
quote:Originally posted by VNGNTN1: DITTO without the margin (if you are new to trading) I am an expierienced trader and don't use it. Think of it as a credit card. VAN
[This message has been edited by VNGNTN1 (edited February 02, 2004).]
Posts: 666 | From: Snohomish County | Registered: Nov 2003
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posted
Thank you BetNitAll for clarifying on that. I never use margin either and never will but I have it also so I can circumvent that settling funds rule. Best way to go in my opinion. Mac
Posts: 145 | From: Seattle, WA 98125 | Registered: Jan 2004
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posted
The settlement period is a good thing though, since it protects you from free-riding. If you have a margin account and start to free ride, you will first get a warning.. then after that, you can be banned from buying stocks for 90 days if you are not a qualified daytrader.
IMO it's better to just have a cash account if you won't use margin anyway, and just learn how to manage your funds appropriately so that the times your money is held you do not have any missed opportunities.
posted
NOT ONLY can they sell the stock mentioned ,but will go right down your other sotcks until you are covered, BAD BUSINESS THINK TWICE BEFORE YOU DO THIS. VAN
[This message has been edited by VNGNTN1 (edited February 02, 2004).]
Posts: 1424 | From: Peoria, IL. USA | Registered: Oct 2003
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