What are Margin Requirements?
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- Опубликовано: 28 авг 2024
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Warrior Trading // Ross Cameron // Day Trade Warrior
![Maintenance Margin Requirement Basics [Episode 370]](http://i.ytimg.com/vi/edZaVBolhcY/mqdefault.jpg)
I am always impressed by your ability to explain complicated things in such an easy way. Ross, please do complete, deep dive video about trading on margin, including all important and necessary info every trader should know. Or there is any among your videos? Thank you.
Thanks Eduard! www.warriortrading.com/margin-account-vs-cash-account/
You channel is a great library, thanks for sharing all these info
Excellent information I always enjoy listening and learning from you
I’m pretty new to all of this and the more I’m learning I see This field is the perfect example of “ scared money don’t make money”!!
👍🤓
Ross, I want to use a margin account simply to overcome the PDT Rule. At this point, I don't want to use leverage because I haven't researched enough on how everything works re: margin calls, leverage ratios, interest rates charges, etc.
To ensure I fully understand... I can use a margin account and NOT incur any fees, interest, or other account-related charges if I simply use my "added cash" (balance) and not utilize leverage, correct?
Again, my aim is to simply get the benefits of having a margin account to be able to trade multiple times/day with instant settlement, rather than wait 2 days. Currently , in my cash account I overcome PDT by only using settled funds, but I really believe I can make more money (and quicker) by using the FULL instant settled balance multiple times/day, rather than a fraction of "settled funds" every other day in a cash account. There's a huge benefit to be able to get in and out of a trade at will vs counting your trades and risk staying in a position longer due to account-type limitations.
Hopefully he responds because I'm trying to do the same.
Deundre Armstrong Found out using leverage isn’t required. You can simply trade using your cash. I would recommend having a little more than the account minimum at all times just in case you go under after a trade. If you do use margin just be sure of all requirements (ie overnight leverage, etc).
You should do a video on margin violations when shorting stocks. Those are really daunting for people to read and understand when they're not familiar with the terminology, but those also could potentially screw people over without them even realizing it. In any case, great video!
Ross I am newbie here and I'd like to learn with you.
So 3 things:
- Which platform do you use to trade: Metatrader 4 or 5?
- Where am I supposed to start to learn how to day trade
- Where can I find information about the market in order to know which asset to pick up and trade?
I would be eternally thankful if you could help me.
Davilson from Sorocaba (in Sao Paulo State) / Brazil
Hey Davilson, I use Lightspeed to trade: www.warriortrading.com/lightspeed-trading-review/
The best way for you to learn more about trading and how you can get started would be to join us in the next live Warrior Trading webinar. It's free to sign up and you will receive a copy of my best selling ebook "How To Day Trade" just for attending!
Sign up here: webinar.warriortrading.com/signup
@@DaytradeWarrior Signed - I will be there.
In which part of the world are you?
USA
Thank you Jeb from the Minecraft team I will never forget this information.
👍😂
Thanks Ross I appreciate the information you produced.
You're welcome!
Interactive Brokers has amazing overnight margin interest rate. It's a swing traders dream.
Yep that's true!
I'm in a sub 25k cash account with no commissions right now so I can trade more until I grow to 25k+!! Thanks for the info Ross! Have a nice day :-)
You're welcome!
As you may know the United States has what's called the Pattern Day Trader (PDT) Rule. That means you need a minimum of $25,000 cash balance in your broker account in order to day trade more than 3x in a 5 day period. Since most traders take 3-5 trades per day, they are considered Pattern Day Traders. Many of our new students don't have $25k. There are brokers that are based off shore that do not adhere to the PDT rule such as Trade Zero (non-US only) and CME Group. You can learn more here: www.warriortrading.com/pattern-day-trader-definition/
You can open a brokerage with as little as $500 at some places. For the rebate program, TradeZero (Non-U.S. students only) requires a minimum of $1000 to qualify for rebate and Lightspeed required $25,000. But there are brokers that require only $500 to open an account, such as CME Group.
You can learn more here: www.warriortrading.com/tradezero-broker-rebate-program/ and here: www.warriortrading.com/cmeg-broker-rebate-program/
I hope that makes more sense!
This is just superb, I been tryin to find out about "software maintenance manual example" for a while now, and I think this has helped. You ever tried - Peanlivory Singular Predominance - (just google it ) ? It is a smashing one off guide for discovering how to learning how to start a successful handyman business minus the normal expense. Ive heard some amazing things about it and my mate got great success with it.
Thank you for the help now I gotta run up 25 racks
Thanks Ross . . Also.make video for minimum Monthly charges required to.pay for such day trading account
Awesome info. Thanks Ross!
You're welcome David!
Concerning account minimums: if I open a new account with the brokerage's minimum amount, will I be dropping below that immediately as they charge me fees meaning I'll need to deposit more right away? For example, opening an account with CMEG ($500 minimum), do I need to put more in to cover data fees, software fees, inactivity fees (any others I'm missing?) as I'd like to spend a few months paper trading to learn the platform and to show consistent profits? I recall you opened your small account challenge at Suretrader with ~$700 but after fees, it came to ~$583. I'm trying to figure out how much to deposit into my new CMEG account initially so I don't have to repeatedly pay wire transfer fees in order to keep my account balance above $500. Thanks for any info you can provide and for entertaining such a wordy question!
Kevin Ullman that’s correct! I made the mistake of funding my sure trader account at the end of December, so on January 1 they took out fees for December since my account was active. I’d recommend opening accounts early in the month so you don’t have fees until the beginning of the following month.
I think you just have to add up the cost before deposit and then deposit. at the end if you lose on one trade you will fall below the required amount which means you have to deposit any way.
Ross you forgot to mention there is probably no margin on IRA accounts even if you have over $25,000.
The title says and the video is about margin accounts not cash or 401k/ retirement accounts
So say I have the minimum 2k in my account. And I use just my cash 2k to buy in to a stock if it drops below 2k will it be liquidated to keep my account at 2k? Or will I have to put money in? Also say I trade on a monday so the settlement time is 2 days but in a margin it automatically in your account. So I use the money from the trade on Tuesday. Is that on margin or is it considered my money since it will be in the account on Wednesday.
Hey Ty, Each broker might have slightly different rules and margin requirements however you can learn more about margin vs cash accounts here www.warriortrading.com/margin-account-vs-cash-account/
Man Ross thank you Much, I am getting my Series 7 and hoping a can still make trades in the AM after an all night shift, hope they are not too strict becasue of my license?
Good luck!
I have an account well over 25k but still was hit with a PDT violation. They said I was trading a non-marginable security. I still do not understand PDT rules well.
Sorry to hear about that issue!
I have a basic question: for example, I have $30K cash and $90K margin limit, does it mean I can buy then sell $120K stocks unlimited times within a day without worrying about the T+2 rule?
If you have a margin account with 4x leverage, you can buy and sell up to that amount as much as you want
@@DaytradeWarrior thanks !
If I have a margin account of say $1000, I make a trade using my 4x leverage, buying $4000 worth and I lose, leaving my position at $2500, what happens?
You unfortunately owe the brokerage.
Warrior Trading is this even on plus 500? I buy an option for £30 and I go £-35 I owe £5 ?
Hey Ross, I was wondering, I will start live trading soon and am using SureTrader which option of SureTrader Pro did you use?
They have a few options available. Did you pick the regional quotes and Nasdaq book depth option?
Please let me know. Thank you.
So I'm not using any margin but my account went to 24k
I got an Equity margin call
How long do I have to get the account back to 25k?
I don't see this being too bad as I have only used cash and not any margin.
I honestly would rather go to cash account, but only option I'm given is to reset my pdt status
You'll need to reach out to your broker to learn more about how much time you have left for your margin call
Thank You Ross. How does one find out what the interest rates are? Are they written next to the stocks? Or a broker sends a separate notice?
You'll want to check with your broker to find out what the best way to see that information would be, as it will vary between brokers
Great info!
thank you
Amazing 😻
Thanks 😆
I don't get it, then what is the $2000 margin account offered by TD Ameritrade? Does it not do the same thing? Or am I still limited to 3 trades in 5 days, but with immediate access to funds?
If my account has 27K and I placed a trade worth 7,000 (remain balance 20K) then I sold it in the same day with profit let’s say $300, would that makes my account under restriction or not? Because now I increased the account 27,300, would I be okay to dat trade as much as I can?
Yes you would be until your account was over $25k per the pdt rule.
Where I can I find the margin requirements for a particular stock in IB, before I buy it?
You can reach out to them for help with that!
Why did you say that we shouldn't want a cash account? Why not?
As the account grows, will the equity margin also grow, or it is the trader's responsibility to call the broker and have the equity margin updated to the latest growth?
Hey David, The margin equity will grow with the account you will not need to call the broker to update it.
@@DaytradeWarrior Thank you Ross!
Please I have a question ^^ is 1 MES futures equal to 50 shares of spy ?
Check out this blog: www.warriortrading.com/e-mini-futures/
@@DaytradeWarrior Thanks ^^
How does one find out which equities have been used as collateral for margin? Within my trading platform I see a BP Effect entry next to three of my positions so I am assuming that these three holdings are the collateral.
Hello, is that 25k balance refers to both, flow cash and stock value that we have in our account? Thanks
As you may know the United States has what's called the Pattern Day Trader (PDT) Rule. That means you need a minimum of $25,000 cash balance in your broker account in order to day trade more than 3x in a 5 day period. Since most traders take 3-5 trades per day, they are considered Pattern Day Traders. You can see some examples and in-depth explanation here: www.warriortrading.com/pattern-day-trader-rule/ and here ruclips.net/video/CDPxDCMHM10/видео.html
Many of our new students don't have $25k. You can open a brokerage with as little as $500 at some places. Offshore brokerage CME Group is one of these brokers. TradeZero (non-U.S. students only, not eligible for Canadian students) requires a minimum of $1,000 to qualify for our rebate program ( www.warriortrading.com/tradezero-broker-rebate-program/ ) and Lightspeed requires $25,000 ( www.warriortrading.com/lightspeed-broker-rebate-program/ ). And of course, you have the option of a cash account at a US brokerage! Here's a helpful place to go to explore your options further: www.warriortrading.com/how-to-day-trade-without-25k/
I hope that makes more sense!
@@DaytradeWarrior thank you for the information. It does help!
Huge help ty
If you are using a cash account, can you buy stocks that have special margin requirements?
Yes you can, margin requirements simply prevent you from using too much margin.
Whats the downside to a cash account? You can only buy stocks with what you put in?
You have no leverage and if you make a trade you have to wait 2 days to trade with that money again.
thanks for the awsome video, i have a question regarding margin and margin call
supouse i have 10k in my account, and i bought x stock's each shares for 10$ and i have 1000 shares of x stock, the price went against me and droped to lets say 4$ and i am in lose it went till 3.5$, now i am in a big lose, and i decided to wait and be patinet, then it went up to 12$ lets say within 3months, and i closed my position with profits, will i have margin call in this senario when the prices drop, i used the money that i have in my account without borrowing or using any lavrage.
Shouldn't result in a margin call if you didn't use any margin to hold the position.
Dude turn on ur auto correct or something
Do you get paid dividends on margin? (I'm using webull and robinhood.)
e trade keeps taking money out of my account. it says Open Calls:The minimum cash deposit needed at this time.
i dont say trade. iver NEVER sold a single stock... any suggestions?
Unfortunately we are not sure on the details of the issue you are experiencing. We would recommend reaching out to their support team for more insight. We wish we could be of more assistance!
Excellent videos and certainly subscribed to you! I’m sure you have answered this many times and I read the comments trying to get clarity but need just a little more. If I have 28k in my account, above the 25k min so I’m not flagged as day trader. Does this mean I can only spend 3k keeping an untouched 25k balance to meet requirements. ? Or can I spend my 28k but as long as the total account balance from on going trades don’t drop the balance below 25k I’m good ..thank you!! 👍👍
hey! You can trade the whole $28k, just make sure your cash+stock balance stays above $25k at all times. (don't lose -$3k)
Warrior Trading thank you for responding and giving me answer. Appreciate the help and all the useful videos!! Thank u
Do you have any information on what it means when institutions own over 100% held by Institutions?
I just got a margin call and it says that i have to put 11k, but I have 12k cash and no open trades. Am I going to lose my 12k?
Hey Elkuark, I am not sure, I'd reach out to your broker for that.
I know what Margin means, but I'm confused when its says maintenance requirement 100%..is maintenance & margin the same thing?? Help I'm new to this..I'm trying to buy market, not interested buying using margin, but this message still pops up,.maintenance requirements 100%, so I cancelled order Until I learn more
Hey La,Trina, The purpose of maintenance requirements is to ensure that investors using margin accounts to make leveraged investments do not find themselves unable to repair their margin loans. In this manner, maintenance requirements are intended to reduce credit risk for the brokerage firms.
i have a negative day trade BP amount right night, my overnight BP is positive, how can I tell if I will receive some type of call tomorrow?
TY for the info and knowledge. If I buy a stock at 100% initial requrement for say $60. Total cost is $120 with the inital. Sell the stock due to margin calls later for $60..Do I lose $60 in intial margin or is it added back and break even? Gone forever?
I’m not sure I understand your example. If you have 4x leverage on a 25k account, you have 100k in buying power. If you buy a stock for $95k you are using all your cash and most of your leverage. If the stock drops and you sell the position for $90k, you lost $5k. Your account goes from 25k to 5k. The profit/loss of the trade. If you hold the position and it goes down a lot and you sell it for 50k. You lost $45k. You only had $25k in the account, so you are now -20k with a margin call and you owe your broker 20k.
@@DaytradeWarriorwhoopsie
So if I use margin only for intraday trading, and never hold it over night, I wont get charged margin interest rates?
Hey Mark, Sure, that is correct. No margin interest when only day trading. That is only charged for swing trading.
@@DaytradeWarrior Tank you very much!:-)
My account was approved and I only have $1000 is there something wrong?
For margin
I would recommend reaching out to your broker to learn if you have a margin account, which is what is required for margin
Can I use more than my BP over multiple trades in a day? Say I have a margin account with a BP of 100k and I took 3 separate trades of 50k. So I used 150k total throughout that day just not all at one and didn't carry any over night.
As long as you are not trying to buy more then $100k at any given time, you can trade unlimited with your buying power
Can you explain this on paper, still not clear.
Check out this page to learn more: www.warriortrading.com/margin-account-definition-day-trading-terminology/
Can you get your broker to limit Margin borrowing to 1000 dollars so you can accidentally buy to many shares?
Don’t like the idea of playing with money I don’t have.
Thanks
You can trade a cash only account if you want to avoid margin
So, is maintenance requirement the amount I need in my account to keep open positions? I have less than 25,000, and it's a cash account, I guess.
More or less, we would recommend checking with your broker though.
activtrades states that for CFD the margins are increased when the account equity increases over certain values, to be precise they double the margins if you have positions of 100-250 lots, and x4 for positions over 250 lots. This is equivalent to halving or dividing by four the leverage. This is not clear to me: if I start with 50000 and use let's say 15000 to open a position and as I make a profit I increase my position so that the total of the lots becomes greater than 100, will the broker reduce my leverage from 400 to 200 and therefore decrease the profit that I have made up to that point? In other words can my leverage be modified by the broker during an open trade?
Hey! I don't trade CFD's.
I don't get it I bought some tsla stock and I get all this margin crap coming up. I didn't buy it on margin and not interested in borrowing any money so why is it showing me this?
That would be something to check with your broker about!
I was wondering whether the minimum margin of 25k applies to no us citizens. Since I'm just starting out doing stocks. After developing a strategy I'd like to hop in the game
The PDT rule applies to all US based brokers.
Anyone know how much the interest rate on Lightspeed cost for $25,000 margin loan
There is no interest charged for day trading on margin
Hi, I have a question regarding the change in margin from day to night. Say I meet all the margin requirements and have 25k in my account and open a position at 9:30 using my 25k with 4x leverage amassing to a 100k position. Say I want to hold that position till 19:30, right before the after hours market closes. The question that pops to my head is if the market closes and goes into after hours, does the change in leverage from 4 to 2 count towards the position that I started at 9:30 in the morning? If so in order to avoid my position from being liquidated by the broker, do I have to sell right before 16:00?
a/h margin is only 2:1 instead of 4:1, so you do need to scale down.
Thanks for the reply! Been a part of warrior trading for about a month now and it’s awesome! Also, this isn’t related to margin requirements but it’s a question I’ve always been curious about. Hypothetically speaking, if I had a long position for $10 with a stop loss at $9 but suddenly a gap forms and puts the stock at say $6. Would I have been able to get out at $9 where my stop loss was? Thanks in advance!
Which brokers do you recommend?
Hey Daniel, For accounts over $25,000, you can look into Lightspeed (available to US and all international residents except Canada).
Lightspeed review: www.warriortrading.com/lightspeed-trading-review/
Lightspeed Rebate Program: www.warriortrading.com/lightspeed-broker-rebate-program/
Lightspeed website: www.lightspeed.com/
For accounts under $25,000 (as little as $500), you can take a look at CME Group (available to US and all international residents except Canada).
CME Group review: www.warriortrading.com/capital-markets-elite-group-review/
CME Group Rebate Program: www.warriortrading.com/cmeg-broker-rebate-program/
CME Group website: cmelitegroup.com
If you are looking to trade multiple products to include futures and options, you could also take a look at TradeStation (available to US and most international residents except Canada). You can open an account with as little as $500 there. However, you will need $25,000 to trade equities and avoid the pdt rule
TS Review: www.warriortrading.com/tradestation-broker-review/
TS Rebate: www.warriortrading.com/tradestation-broker-rebate-program
TradeStation website: www.tradestation.com/
Canadian and most other international traders can look into TradeZero (available for accounts as low as $500, or $1,000 for our Warrior Pro rebate program):
TradeZero review: www.warriortrading.com/trade-zero-broker-review-how-it-matches-up/
TradeZero rebate: www.warriortrading.com/tradezero-broker-rebate-program/
TradeZero website: tradezero.co/
Thanks
So there is no interest or fees when using a margin account, i have td ameritrade, so if u make a 2 minutes trade using margin you dont have any interest on the money you borrowed
👍🤓
What do you meaning? Are you saying that broker let you loan money that day.
Hey Paolo, You can read about Margin accounts here: www.warriortrading.com/margin-account-definition-day-trading-terminology/
does trading futures also requires 25000 dollars maintainence?
Margin requirements for futures are different, we'd recommend reaching out to a futures broker for that type of info!
What's wrong with a cash account?
you wont be able to short stocks.
RubixMan99 With the cash account you have to wait two days for trades to settle which means you really can’t day trade.
@@DaytradeWarrior So it takes a few days to get into a position?
@@DaytradeWarrior Or just takes a few days for the money to go back into the account after selling?
Rubix - www.warriortrading.com/cash-account-definition-day-trading-terminology/
Here's some good info on Cash Account
Can you sell option (put) with ac below 25K?
Hey, Yes you can, you just need to be approved by your broker for selling options.
@@DaytradeWarrior thanks for replying... 🙏😊
If you don't tap into the margin, then it's like a cash account, right?
yep, except that trades settlement immediately.
@@DaytradeWarrior Thank you, man. I thought you were not going to reply. It's an honor you replied to my question because I admire you. Thank you. Take care 😃!
So I have over 25k in my account. So is there an option to disable me borrowing money from the td brokerage. I ask because I don't want to accidentally buy more than I have. As well I just want to use my money only.
you can use a cash account rather than margin
@@DaytradeWarrior I have 25k and I want to open margin account so I can day trade but what I don't want to do is buy more than my 25k accidentally so is there a way to disable it so I don't buy more than I have while having my margin account
Hey there, how do you stop from trading on margin
You can just trade a cash account if you do not want to use margin
reduce your position to your equity
So if I have 24,999 cash in a margin account (50k total buying power) am I under pdt? I am under the impression margin balance puts me above pdt rule. Also I’m td ameritrade.
It has to be 25,000 of your own money. So if you have 24,999 you're under PDT
Jorge Gonzalez thank u.
Just find a dollar somewhere 😂
@@jacobballer3734 and then don't loose. I'll probably just park some extra money in my account and not trade it. Interest rate is better then the bank.
First...
First!!!!! =]