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I plan on creating a margin account but I will be daytrading/swingtrading and not investing, so how does the margin work if its 50% of the purchased securities?

 

havent traded stocks for years - better off with futures for sure....

 

anyways, to daytrade stocks you will get more margin, so you only put up 25%

 

basically, whether putting up 50 or 25%, you will borrow the rest from the broker. He will charge you for this.

 

Im paying 5% for my investments on margin (im not trading). other brokers charge 6-8% per annum for the amount borrowed.

 

Any losses come out of your share, not the brokers of course.

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havent traded stocks for years - better off with futures for sure....

 

anyways, to daytrade stocks you will get more margin, so you only put up 25%

 

basically, whether putting up 50 or 25%, you will borrow the rest from the broker. He will charge you for this.

 

Im paying 5% for my investments on margin (im not trading). other brokers charge 6-8% per annum for the amount borrowed.

 

Any losses come out of your share, not the brokers of course.

 

hmm, I was under the impression that in all cases the broker can only legally give you 50%?

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hmm, I was under the impression that in all cases the broker can only legally give you 50%?

 

 

well I could be wrong - stocks arent my main focus. Im pretty sure 50% is the max for position trading, but pattern day traders I believe it's more. Best ask a broker.....

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a good summary of it can be found here - mainly for US residents and it depends on what type (and size ) of account you can use.

 

Margin Requirements

 

In the UK (and elsehwhere), spreadbetting and CFDs allows even more leverage (ie; less margin)

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when you open an account you are usually opening an account that already has margin capabilities. It is not like you have to ask for margin each and every trade.

 

This is simple - ask your broker to explain it to you if they cant or cannot provide you with this choose another broker....if you cannot understand how the system works - then you should not use it.

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