🎰 What trading on margin means and how to use it | The Dough 💲how
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- Опубліковано 3 лип 2024
- Today we will cover the basics of margin for active traders. Using margin can be an amazing advantage but you should be aware of how it actually works to avoid the dreaded margin call. Today we will start with the basics of what margin is and how it works and then go into a detailed breakdown of an actual trade using margin. Don't worry, we will keep it simple and take your questions along the way.
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This video is underrated, this video covers every insecurity about Margin
By far the best video explaining the topic of margin trading. I've seen many now and this was the first one that actually made sense.
The BEST guy I believe to explain stock stuff. Great job explaining margin.Look forward to the other videos!
best explanation about margin on youtube!
Best video I’ve seen explaining margin! Especially margin maintenance. Thank you very much!
Great job explaining margin that I understand. I have been you tubing margin call explanations for months and this is the clearest explanation yet. Thanks!
Thanks! I panicked a ton with lack of margin knowledge and bought to close a position just to avoid being margin called. If I'd have seen this first, I would have found out I was more than ok and probably would have made considerable gains. Live and learn and knowledge is power. I appreciate the video and will go forward without the panic attacks in the future!
This was the best video I’ve found on margins. I’ve been a futures trader for 5 years and an options trader for one. So you use cash first and my short options are always offset with a long option. This new world of shares is a lot more sketchy. A lot of these videos besides this one, are quick and confusing. This man explains everything in detail! Makes me feel better.
Thanks so much for the education. Great job!
Absolutely one of the best videos on margin. A million thank yous, cleared a lot of things up for me & introduced things I never knew existed, thanks 🙏🏽🙌🏽💪🏼
I agree completely, the best explained video on margin.
Great information Dustin thanks
Another gem on UA-cam ... this guy is giving you the straight scoop, as opposed to the attention grabbers that pitch fantasy situations that won't happen to you. Fortunately there are these nuggets of wisdom that still make UA-cam worthwhile ... you just have to know how to separate the wheat from the chaff (not hard ... if it sounds too good to be true, with no downside mentioned, then its probably chaff).
Great vid. Subscribed!
thanks man good one
Good information. Thank you.
You make it so east to understand. You should have 500k subs
Appreciate this video
Trading on margin carries risk, but it's so much better than taking a loan from the bank, and the interest rate really is negligible. Also, so long as you have good communication with the broker, you can sort out margin maintenance very easily by partially closing volatile stock at a loss - thus avoiding having them close your position on more profitable stock that you've also margined. I feel like brokers are willing to give you more leeway with margin calls if you are respectful and act fast. If you avoid giving them the impression that they're going to lose money, they'll at the very least speak to you without instantly pushing the sell button or sicking their automated stock market bots on you.
Absolutely great video for covering margins, their different types & requirements, and the risk / profits they can bring to the savvy investor. Definitely a lecture worth memorizing.
what is the interest rate
Most comprehensive explanation on margins I’ve seen thus far. Greatest content
Such a good video
New to a role as a Brokerage Representative - Associate and glad to have stumbled on your channel.
Great info
Subscribed :)
So far, I have margin traded my $3000 to $1127, I'm doing great!!!
wish Id seen this video before I did 20 hours of research figuring it out on my own. haha. great vid!
I would always just set a stop loss at the position I entered on
Great explanation 👍 your channel is so underrated! You are one of the few people that actually explains and teach concepts in the trading world. Thank you!
Oh thank you so much!
Nice video😊
Great show; are you still doing them?
Thanks for the video on margin. I am contemplating signing up for a margin account so this video definitely helped. I disagree that a margin account is not for long term investing especially when we can find such low interest rates on Interactive Brokers - we can magnify our long term returns with a margin account.
I thought I understood him to imply that using margin for a long position, and the cost of borrowing the margin, would eat away at any growth on the investment over time.
Another great thing about margin is just the fact that you don't have to wait 2 days since the transaction closed(T+2) to settle the money and be able to reuse it. Even is you don't need leverage.
Big like
I wish he spoke more on the rate accrued on the loan, like giving an example as time goes on.
You've explained one of the values at the top of my IBKR portfolio page. Now to understand the rest.. 😭
How does maintenance margin work if you use 4x leverage day trading and the money your putting up is essentially the 25% already?
Great video BTW
Great video, as always! One question that comes to mind is: If you decide to sell a portion of a position, does the broker have first dibs? In essence my question is about wanting to keep a position but using the gains to “buy out” of the margin. Thanks!
You do not get to decide when to use the margin or not. Its always there :)
So if you bought 20,000 of a stock and it drops down to 15,000 can you use a margin account and add 10,000 as leverage so u have more power when it rebounds? And do you have to have a certain amount of money in settle cash in your account when you use a margin trade..like the example above let's say an additional 4000 in settle cash, is it required? This video changed my life thank you
Thank you for such great explanation. QQ let say Buying power is 20K including 10K for broker and 10K for Individual...So if I make trade of 8K; does that go 4K each from each bucket?
I have td ameritrade with a margin account... I have a certain amount of margin available to buy stocks or options based on the total amount in my account... I can just use margin for stocks or options I don’t have to put up any cash just pay daily interest on the money taken from margin
Hi there I have just one question, why my margin maintenance went negative and how can I fix it? Thanks in advance
If I'm holding long on a position & the stock forward splits 3/2 when the stock is +1.5% with a margin account. After the split 100 shares should be 150 shares @ a different average. Correct? Because, I'm experiencing 100 presplit & 100 post split @ -30%. Would they just rob 50 shares & not lower my average? If holding on margin.
Great content. Thank you.
RH now offers 2.5% margin
I learned so much about margin in this vid. Thanks for the upload!
I am new to the trading market June 2020, this video is exactly what I need to know. Thanks and you are very cute ;).
Great vid. Just wondering...how is margin interest accrued and paid back? Also, once you establish a margin position, how do you get off margin if you change your mind? Thx!
Very great question I am waiting for answers too
@@jahkings7358 Did you ever get any answers?
@@Anarchy-Is-Liberty when you sell the posittion or add cash to the account it goes towards paying off margin
Hey great video, thanks for the explanation, I have a question, what I don't understand is the interest of the margin, like when will they start charging interest and how will I avoid this interest ?
if the rate is 2.50 % and they give you $10,000 on margin but only use $1000. would the 2.50 % be applied to the amount used or borrowed?
So, I just sold a stock and don't want to wait for the funds to settle to re-invest the money. Can I use a margin account to re-invest the value of the future settlement money and then pay back the margin account once the sale settles? Or does the margin account automatically get reimbursed by my settlement funds once it's settled? Or do I need actual cash in a margin account?
If i have a stop loss of 0.5% at 20 stocks will i get a margin call. Capital is 50k
What movie is being referenced at the start?
Great video but ameritrade margin interest is 8%, dude that's a lot of money on interest also is due at as soon as cash sale is present in the bar account
A J depends on what kinda money you putting in. If it’s big money then the interest is nothing if your positive. If it’s just around entry funds then I understand your concern.
Question.
I started 15,000 broker 15,000 me. Then I'm lucky and the position turns to 15,000 broker 75,000 me.
Should I sell the position, and buy it again to be 45,000 broker 45,000 me and have my 30,000 gain available for something else ? Or this 30,000 extra fund appears to me available without me having to do the sell and buy operation ?
I bought $5000 ARKK and $5000 ARKG on margin a month ago within my Schwab account. Fingers crossed..
Great video, can you clarify something. I have over 100k of margin that I can use in my trading account. If I want to buy 25k on margin to buy an ETF how much would i be charged a month for borrowing that money. Thank you.
Hi thanks for the info but you should let people know that PDT rule only applies to USA residents
What do you mean by this 🤔
How do we pay the margin account back so we don't have to keep paying interest?
would it be a bad decision to use margin on high yield monthly dividend etfs? 8+%
Do you know the maintenance percent of robinhood?
Sorry I have a question not really related to this topic but I can't find the video that you mentioned this matter. In a recent video you talked about traditional 401k vs. Roth 401k vs. after-tax 401k. So Roth 401k is not the same as after-tax 401k??? What are the differences between them? Thank you very much!
Correct... After tax is a different portion if offered by your employer. Check with them to see if its an option.
Little pointer coming from an Instructor for the government, educator, and professor...have stuff prewritten...just some friendly advice.
confirm..margin only starts when you have depleted the amount in the account?
correct
Wish I would have seen this video earlier... I was wondering why the broker representative was so confused when I asked him how much do I owe on that loss using part of the brokers money
I think leveraging with margin can be a great way of investing but my problem is that I started maximizing it right before this pull back 2 weeks ago. So I got hit twice harder and lost about 25% of what I had(my portfolio is tech heavy) so far. My plan is to hold tight until I get out of this dark tunnel, I still have a plenty of room to the margin requirement but I am getting nervous as this correction lasts longer. especially on the day like yesterday. I can sell some shares and stay longer but that would also mean giving up a faster catchup.
Any advice on this?? Thanks
You should have a loss planned for each position before you place the trade for sure. Need a plan ahead of time so you know what you will do before it gets all emotional. ;)
2 questions
If I have a margin account,. Is their a way to not borrow from the margin?
If I'm in a position with a margin and made profits, how do I give the margin back its funds from my position?
you'll never have to worry about interest/borrowing if your cash balance is positive (except sometimes brokers have sneaky rules about cad/usd conversion you'll have to look into)
Anyone if you look here, I'm transferring 22k worth it stock and 5k in cash, will I still have pdt standards on me, if not do I get 4/1 margin on my cash or on my whole 25k position? Confused about that. I'm basically transitioning more into day trading but I want to hold positions that I bought for cheap till I believe they're at post covid prices...
My TD Ameritrade account:
Cash available balance: $125,000
Margin available balance: $115,000
How much can I pull out right now for personal use????
I’m confused
I'm confused
Whatever you take out on margin you pay interest on... so if you take 100,000 for margin at say 8% you take 100,000 x .08 and divide that number by 360 and that’s your daily interest charge due at the end of each month
I have stocks in an personal growth account for playing the market. I didn't have margin until recently. I wanted more options so applied for margin. Now all of my stocks say margin, does that mean I have to start paying the margin fee on all the stocks I owned prior to opening up margin?
margin fee will only be on trades when you go into negative cash balance (ie you start borrowing)
What if I win with there money over 25,000 I wanna do this I don’t under stand wrecking my day ?
21:55
“You can’t live in fear of what happens in some black swan event”
Little bit of foreshadowing there.
I want to join your group!
Do they charge a % fee on Webull for using the 4x leverage day trade buying power? If I borrow 10,000$ and win do I have to pay them back an extra part of the borrowed money or do they just take their 10,000$ back and I keep every bit of the profit?
let me know if your question has been answered else where, thank you, I ask myself the same thing.
The interest charge is per day. Day traders do not hold position over night so essentially they don't get charged interest. They usually bill you at the end of the month, not right away. The way this video explained it, whatever profit you make is yours and whatever loss is yours.
So if you buy 10,000$ worth and 5,000$ is yours and 5,000$ is leverage, if it goes to 9,000$ then its now 4,000$ is yours and 5,000$ is theirs. Same thing the other way, If it goes up to 11,000$, 6,000$ is yours and 5,000$ is theirs. Essentially, their part doesn't move.
Hope this helps
Sergio Muñiz yeah it helped specially the day trading no charge part I didn't know. Everything else I found out the more I kept doing research. Thanks man!
how do you pay them back?
sell shares or deposit more money
I feel like all the tesla buyers now are training on margin
Should of went heavy on margin 3 weeks ago
Seems complicated, what if your stock stays flat, you need time to see if the stock will grow, don’t you just pay daily interest? Example, I buy a 2K stock, it stays at 2 K, I want time to see if it goes up, don’t they just chg some daily interest? I realize if it drops they can take or sell another of my stocks to get their money back. The question is how much time do they give you? If it doesn’t do well or stays flat, they are after you in one day? What’s the time frame?
How do you pay interest on Margin? Is it immediately taken away from your profits? Or do you pay that back at a later date?
I asked myself the same thing, like how will I avoid paying this interest ?
Same question. I think I've watch 20+ videos on this stuff and not one has given very specific, step-by-step details on it.
Shooters dream I've been using it now and still have not idea but I'm guessing it acts like a loan but this is different since u can borrow in the morning and give it back at night so u won't be charged and if u do it'll be for that one day. Which is very very minimal, don't hold margins for weeks for sure, margin is only to be used as a quick cash while your real cash covers it, u can use it as a real loan but gonna cost u the interest
Can I use partial margin?
Hi, can you help me with something that I've been curious about? Hypothetically, If you have 100,000 dollars in your account, can you typically buy 100,000 dollars worth of stock then sell 100,000 dollars worth of stock in the same day, then buy back 100,000 dollars worth of stock in the same day, then sell 100,000 dollars worth of stock in the same day and keep day trading all day with your full portfolio balance? Or do most brokerages cap how many times you can trade your full portfolio value in one day?
I think that you can trade as many times as you want!!! Only think is taxes or loss you can have with some of the stocks.
TD is charging me about 10 % am I paying too much ?
damn!, how to avoid interest though ?
Depends on how much buying power your got. If your a high roller interest is peanuts and who cares if your making big money. If you have 2k to invest with margin then I understand and yes 10% is too much.
@@josephdiaz85 they reduced it to 6% now
@@josephdiaz85 that's not how percentages work lol. high roller means you lose even more money
Ouch I know people hate Robinhood but it’s only 2.5 you could literally put all your cash and margin into qyld 12% dividend stock and still be up almost 10% a month so on 80k you’ll be making $800 a month
Your statement at 5:30 that the broker always puts in what you put in, at 1:1, is false. If you have $10,000 cash in a United States Regulation T margin account, you can buy any amount at all as long as it does not exceed $20,000. Regulation T simply means you can't borrow more than $10,000 against $10,000 of your own money in a Reg-T account when you enter the trade, meaning, you have to be margined at at least 50% when you enter the trade. For example if you decide to buy $10,000 worth of stock, you will pay $10,000 cash and there will be no loan. If you decide to buy $13,000 worth of stock, you will put in your entire $10,000 and the broker will put in $3,000. It is not split $6,500/$6,500 as you seem to think. You will then have $13,000 worth of stock, a $3,000 margin debit owed to the broker, and $10,000 equity, and you are margined at 10/13 = 77%. Here in Canada, as we have different rules, you can borrow up to 70% initially, so if you have $9,000 USD and you want to buy Apple, you can buy $30,000 USD worth of Apple initially, not $18,000 as in a U.S. Reg-T account. But you would obviously get a margin call if it dropped by any amount at all because you have to maintain at least 30% margin. Anyway, this is absolutely basic, 1+1=2 type stuff and you clearly do not understand what you are talking about. If you think I'm somehow wrong, I would suggest you call your broker, or any other broker, or FINRA and have them explain to you how margin works. No offence but people like you on UA-cam and other social media who talk as if they know what they're talking about are a real problem.
Lesson learnt. Dont trade on margin....too much risk
Understand how it works and its not risky at all :) Don't understand and its going to be a disaster haha
@@Jazzwealth Dont think so. Understanding how it work means it is risky as hell. Borrowing to invest is doubling the risk. Definitely more risky.
Well the beauty is you don't have to use it if it makes you uncomfortable :)
What on your thoughts of using
Margin on SPACs
Seems like a scam just like car insurance and credit card financing
No your borrowing money for more gains. Or greater losses
lol margin fee is "insignificant"??? This video is so irresponsible and misleading
Plz dubbing in hindi language if you can many people wants in hindi adviced thanks
No idea how to do that sorry...