Stock / forex trading 100s of transactions per day - how is the margin calculated?
Stock / forex trading 100s of transactions per day - how is the margin calculated?
Loading saved threads...
delica · External communityPost link
External question — Personal Finance Stack Exchange
Author: delica
Original post: https://money.stackexchange.com/questions/93745
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
Let's say I have 10k USD in my margin account. I place 100 round trip orders in a single day, each worth 2000 USD (999 USD buy order and 1001 USD sell order).
How much margin did I use at the end of the day? Can I do as many 2000 USD round-trips a day as I like?
I am trying to understand how I can do frequent day trading without running into an issue with unsettled funds. I am interested in an answer both relating to stock and forex trading, and any other instrument that settles instantly or otherwise allows me to trade 100s of round-trips each day.
Quote
Report
Stan Kurdziel · External communityPost link
External answer — Personal Finance Stack Exchange
Author: Stan Kurdziel
Original post: https://money.stackexchange.com/a/93825
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
It depends not only on the particular country (and therefore regulating organization), but also the particular broker and even the type of account you have at that broker and probably even your trading patterns over the past week or longer. If you are in the US, start with the
FINRA margin rules
and then check with your broker. They may have an even more extensive set of guidelines, for instance
TDAmeritrade's Margin Handbook
If I had to guess, I would guess that you are likely to run into problems making hundreds of round trips trades per day, but really if you are paying commissions on all those trades and you aren't trying to risk more than your allowed margin at any given time, then there must be brokers who would love to help you.
Quote
Report
Post Reply
Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: Stan Kurdziel Source score (net votes, not local likes): 1 Original post: https://money.stackexchange.com/a/93825 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. It depends not only on the particular country (and therefore regulating organization), but also the particular broker and even the type of account you have at that broker and probably even your trading patterns over the past week or longer. If you are in the US, start with the FINRA margin rules and then check with your broker. They may have an even more extensive set of guidelines, for instance TDAmeritrade's Margin Handbook If I had to guess, I would guess that you are likely to run into problems making hundreds of round trips trades per day, but really if you are paying commissions on all those trades and you aren't trying to risk more than your allowed margin at any given time, then there must be brokers who would love to help you.
Checking account access…