What is Margin | Margin Call Explained
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- Опубликовано: 25 июн 2018
- Stock Margin is when you borrow funds from your broker to buy more stock. Margin can amplify your returns, but it can also hurt them if an investment turns against you.
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I made a mistake in this video. At 2:30 I say that the account was now worth $12,250. What I should have said was that it was worth $12,500. And to make it even crazier. I did the rest of the math correct as if I had said the correct $12,500 the whole time. I apologize. It should have been 12,500, not 12,250. Oops!
Had to scroll to the comments to see if I was going crazy here. Glad to see it's the first comment!
I thought you paid the broker his comptions 250$😂
And what if I tell you I was completely fine with the $12,250 and actually carried on with the example as if it’s a $12,500!
Hahahahahaah no worries buddy it was a greatt explanation!
Cheers
Almost made me think i was going crazy lol
The explanation was very great though. It helped me understand. We are human by the way
Honestly, you could not have explained this in clearer terms. Excellent.
You would be surprised how many videos I went through to get a simple explanation on this. This video was great.
This was exactly the video I was looking for!
Well explained!
I had literally zero percent knowledge about any of this terminology or processes 5 minutes ago, and this was an extremely clear explanation that I don't feel the need to watch another video on this exact same thing
Back to the basics I see. You explained this well!
Thanks John, I appreciate the support
@@LearntoInvest That's a great explanation.
Thank you for a super clear description and examples of investing on margin!
This is the best video I've seen on how margin works. Very clear explanations and examples. Well done!
Amazingly well done! Answers everything, thank you!
The BEST video on margin call tutorial.
Never saw anyone explaining IM so well. Thanks a lot!
The best explanation of Margins I have seen. I now understand it better. Thank You!!!
As easy to comprehend as it gets, thanks!
Wow, thank you for the clear and concise explanation of this!
Thank you so much for the video! Helped a lot!
Mistake or not video explains in simple terms what investing on margin and margin call is. Excellent. Now I understand the old saying "the only tip you can count on from you broker is a Margin Call"
best explanation I've heard! Thanks! We need more videos like this.
What an explaination...at the end of the video..I literally said "WOW" loudly! love love it
Very clear! Thank you!
thanks for the knowledge man!
Thank you! Subscribed!
Watched a few videos and this is by far the best explanation. Thank you!
You are so good at teaching! Thank you!
Excellent Presentation, very clear explanations and you highlighted when interest is paid which is when you have a debt to the broker. This is probably the best you tube video on Margin, Margin Call, Maintenance Requirement. This is a channel worth subscribing. Very good work!!!
this is so clear, way better than textbook
I am here because of GME AMC... Great explanation, now I understand what is going on!
Well explained! Thanks!
Thanks bud!! explaned well
Such a great video
Nice work buddy
Awesome, I just liked the examples and that made it super clear to me, thanks boss
Watched many videos about this but this one actually made it clear enough for me to understand! Whoop whoop 🙌🥳
Very well explained. Thank you 👌🏼🌸
The clearest explanation out there.
Thanks for this amazing explanation
Wow...this was a really quick explanation.
Thank you for the direct and easy explanation
this channel is pure gold.
Great explanation 🙌🏼
Very clear, thanks
Wow this the best explanation so easy and clear
Simple and beautifully explained. Thanks for making this vdo.
Thanks for this well explained video
Amazing explanation!
Thanks. Great video
Thanks. Very clear.
Im currently on margin call on one of my funds so thank you for the very Clair explanation
I appreciate this video, it helps me a lot.
excellent explination. thank you
Well explained !
From Paris
Good explanation..bravo
Great explanation.
Great video
Hi Jimmy, u rule...great explanation!
thoroughly explained
Waw! Very well explained. 👍
Very clear explanation!
No to me its not
Do you het a Margin call after a 0 equilaty or after a 0 available money to invest
Thank you
Very helpful
nice one
interesting
clear and nice
you're a legend
Glad to know Jordan Peterson teaches finance now. :)
😹😹😹😹😹😹😹
Gambling is one thing. Gambling with the idea that your information is twice as good as the markets information is another. Because that's the only way doubling your risk makes sense.
well John, that's a real big tie you got there
Thank You Sir
Clearly done.
this is relevant today.
For those that are wondering how is the margin call price determined, it is initial stock purchase price x ( (1-initial margin) / (1-maintenance margin))
I watched this because I saw this morning the following headline and wanted to understand what was happening: "Coronavirus Could Trigger Mortgage Market Crash as First FDIC-Insured Bank Falls" and "Mortgage holders could be in trouble as the first FDIC-insured bank falls in West Virginia." High-risk mortgage notes are vulnerable to being called, which would make mortgages due in full immediately. "When a bank’s assets get transferred to another institution following a bankruptcy or forced closure by state regulators, mortgages are turned over to another bank or investor.
In such cases, the new lender can “call in” mortgage notes they find to be risky, making mortgage payments due immediately.
Stupid question:
In your example, why can't the maintenance margin requirement just be 0%?
Let's consider an example:
Initially,
Stock value per share = $1
Initial Margin Requirement = 50%
Total shares to be bought = 10 000
My investment = $5000
Broker loan = $5000
My total portfolio worth = $10,000
Stock plummets to $0.5
My total portfolio worth is $5000
Now, the broker can still take back the loan they gave to trader by selling all his 10 000 shares.
In this case, maintenance margin requirement = (my share of portfolio)/(Total worth of portfolio) = $0/$5000 = 0%
What is the point of having a margin requirement bigger than 0% if they are always going to take the $5000?
Thank you, this is the best explanation I've been able to find on this topic. All the others talk about using 10x your investment as margin. To me they just seem like Russian roulette tutorials.
Likewise. I enjoyed this video .
Great video my man!
Can you use stocks you already own within the account instead of cash to meet the initial margin requirement ? In the video, you say he has $5000 “cash” and wants to invest in XYZ....what if he has $5000 in XYZ stock and wants to buy $5000 more and has no cash? I realize it says “buy more stock with that stock as collateral” above him but it’s not mentioned...Thank you for your patience!
i was looking for this to understand the movie.
great
So it's the minimum percentage of the value of your position minus the loan over the value. Anything less, you'll have to pay up to reach that minimum percentage. If not, shares will be sold with the loan subtracted and now you're at a significant loss.
Hi I'm Jimmy.
Just beautiful ❤️
Thx
Is there a way to automate this and just transfer the money to the margin account from an account i have with broker when my maint margin % falls 35%?
I understand.
so well done, but I feel screamed at xD
I am a new to the trading world. I have a question. I have an account deficit balance but I have never used or turn on the margin investing why I have account deficit? I asked some of the agent, but they asked too much personal information. Can it be trust? What question can they as to identify me?
cool, now imma go watch margin call- you know, bcz of $gme stock n all
do you get margin maintance back , say you have to add $ to cover maintenance so you add 100$ say the stock goes back up , do you get that 100 back in your account or you just owe less margin?
Can you pay off the margin debt at any time or only when you sell?
Does margin mean the loan amount or the equity in your account?
How long do they give you to make the payment?
12,250 or rather 12,500?
Yes, that was a mistake. The rest of the math is correct though 🙂
Can 'margin' trade applies to buy or sell?
Does margin call happen at the end of day, after the market close?
Where is interest calculated and how often is it typically compiled
What is the difference between a margin trade and using leverage?
4:11 I heard the chicken voice 😁
Ring ring on my phone
Checked and it's from my broker
Me internally: GUH
Ah, I see you are a man of culture
So when we recieve the margin call, does that mean that when we put extra money into the account, will it just stay there for the broker to cover up his investment, or wit will actually be invested in shares?
It will stay there for the broker as far as I know
So a lower % maintenance margin is better?
Amc to the moon
Sir why brokers give margin?
What is the benefit of the margin that broker gives to their clients.?
If I understand correctly, the broker makes money no matter what with my money. But I have somehow a higher return. Damn, broker you are smart.
what will happen if i pay for margin call and after that stock price go up