I noticed on Choicetrade's website that you can't use margin on stocks under $5.00
Would I still be able to bypass the 3 day settlement rule if I only used the amount equal to cash that I have in my account and never touch margin? All I trade are stocks under $5.00
I am confused how margin allows you to bypass the 3 day settlement rule.
posted
I trade stocks under $5 all the time and I have margin. Their policy is that they will loan 50% of what you put up on stocks under $5. Anything over and they will match 100%. I don't trade using margin though because I don't buy with money I don't have. I just wanted it so I could buy or sell without a 3 day waiting period.
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posted
This is the response I got from Choicetrade:
Hello,
On the Choicetrade website, it states that you can't use margin on stocks under $5.00
Would I still be able to bypass the 3 day settlement rule if I only used the amount equal to cash that I have in my account and never touch margin? All I trade are stocks under $5.00
thanks!
_______________________________
Dear Sir, sorry but this is not possible, under current regulations. Regards, ChoiceTrade Client Services
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posted
Ladybird - You have choicetrade and trade OTC/Pinksheet stocks?? You have no problem w/3 day settlement rule?
Also, to bypass 3 day rule, do I have to set the "source/destination of funds" to margin or can I trade w/cash and have my funds clear immediately as well???
What happens if my account goes under $2,000?? Would I still have my funds clear immediately??
posted
I have the same questions as tippytwo. I just got my margin agreement approved by Choicetrade, and am not sure about what I should use at the 'source of funds' thing when purchasing a penny-stock. Thanks, everyone.
-------------------- Hindsight is 20:1. It's like printing money.
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posted
Tippytwo, I don't trade OTC/Pinksheet stocks. I usually trade stocks between $1 to $5 that are listed with Nasdaq or Amex.
Yes, you have to set your source/destination of funds to margin. I don't believe they will clear immediately if they are set to cash.
I am not aware of having any problem clearing funds if your account is below $2000. But don't quote me on that. It's better to verify it with Choicetrade.
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posted
I got a margin account with Scottrade. I trade cash,but I can't trade after I make a trade with out calling.You can,t trade fast if you have to call every time..They said you will have to call on stocks under $4..Does any brokers let you day trade Sub pennys?
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quote:Originally posted by casper: I got a margin account with Scottrade. I trade cash,but I can't trade after I make a trade with out calling.You can,t trade fast if you have to call every time..They said you will have to call on stocks under $4..Does any brokers let you day trade Sub pennys?
There are several out there...I am using Choicetrade and Etrade...no problems with the pennies...calling every time would be for the birds!!!
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quote:Originally posted by casper: I got a margin account with Scottrade. I trade cash,but I can't trade after I make a trade with out calling.You can,t trade fast if you have to call every time..They said you will have to call on stocks under $4..Does any brokers let you day trade Sub pennys?
There are several out there...I am using Choicetrade and Etrade...no problems with the pennies...calling every time would be for the birds!!!
Do you trade OTC/Pinksheet stocks using margin with Choicetrade??
If no one knows the answer to this question, I will soon know once transferred money gets into my Choicetrade account.
quote:Originally posted by casper: I got a margin account with Scottrade. I trade cash,but I can't trade after I make a trade with out calling.You can,t trade fast if you have to call every time..They said you will have to call on stocks under $4..Does any brokers let you day trade Sub pennys?
There are several out there...I am using Choicetrade and Etrade...no problems with the pennies...calling every time would be for the birds!!!
Do you trade OTC/Pinksheet stocks using margin with Choicetrade??
If no one knows the answer to this question, I will soon know once transferred money gets into my Choicetrade account.
-T2
I trade pennies with Margin in Choicetrade. But, you can't use you're 'Margin' towards pennies.
Example: You have $1000 Cash in your account. It will show that you have $2000 Margin available for trades. If you try to trade a penny (or any stock under $5), you can only spend that $1000 that you have in Cash.
So, you buy $500 worth of a penny. You'll now have $500 in Cash, and only $1000 in Margin available for trades.
In contrast (at least as I think it would be), Say you buy $500 worth of a stock above $5. Then you'll have $1500 in Margin available for trades.
Either way, you can buy and sell pennies under the 'Margin' side of the account, but you just can't use any of the actual margin in order to purchase the pennies.
Hope this is clear enough. I apologize if it isn't. I just started my Margin Choicetrade account recently, and have little experience, but I think I answered what you were looking for.
quote:Originally posted by HOOKED: Now I am confused. So in order to daytrade would just be easier to open up a Day trading account?
Or could you day trade the same stock using a margin account?
In a margin account, you can only daytrade (make one roundtrip in a stock in a day) 3 times in a given 5 business-day period.
If you exceed that limit, you will be marked as a 'Pattern Day Trader' and you must maintain an account balance over at least $25,000.
So, you can kinda daytrade in a margin account, but you can't really do it as much as you would want to until you have a balance of at least $25,000 in your account.
quote:Originally posted by casper: I got a margin account with Scottrade. I trade cash,but I can't trade after I make a trade with out calling.You can,t trade fast if you have to call every time..They said you will have to call on stocks under $4..Does any brokers let you day trade Sub pennys?
There are several out there...I am using Choicetrade and Etrade...no problems with the pennies...calling every time would be for the birds!!!
Do you trade OTC/Pinksheet stocks using margin with Choicetrade??
If no one knows the answer to this question, I will soon know once transferred money gets into my Choicetrade account.
-T2
I trade pennies with Margin in Choicetrade. But, you can't use you're 'Margin' towards pennies.
Example: You have $1000 Cash in your account. It will show that you have $2000 Margin available for trades. If you try to trade a penny (or any stock under $5), you can only spend that $1000 that you have in Cash.
So, you buy $500 worth of a penny. You'll now have $500 in Cash, and only $1000 in Margin available for trades.
In contrast (at least as I think it would be), Say you buy $500 worth of a stock above $5. Then you'll have $1500 in Margin available for trades.
Either way, you can buy and sell pennies under the 'Margin' side of the account, but you just can't use any of the actual margin in order to purchase the pennies.
Hope this is clear enough. I apologize if it isn't. I just started my Margin Choicetrade account recently, and have little experience, but I think I answered what you were looking for.
Anyways, good luck.
That answered the majority of my question, but the bigger question is if your funds are clearing immediately by using the margin option on OTC stocks??
posted
it has appeared that they've been clearing immediately.
as soon as i sold a portion of my RSHN, i was able to use those funds right away to buy back in on the stock. and it also appeared that i could have flipped the stock again the next day with no problem regarding the settlement of funds issue.
hope this helps.
-------------------- Hindsight is 20:1. It's like printing money.
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