Jun 22nd, 2012, 10:39 AM
I read alot about td waterhouse and found out it was way simpler with them you invest 1000$ you get 700$ in margin. i would typically invest 30% of that 700$ MAX
With questrade you get 3:1 margin but i am trying to find out what is a safe % to invest.
1) I invest 1000$, i still have 2000$ left in buying power. Should i continue like with TD and invest 210$? (aka 30% of 700$)
2)If i have 700$ and invest 1k$ with it (buying power left 1100$). what's the price i would need to hit to get a margin call ? 300$?
kinda confused here, thanks for the help
Jun 22nd, 2012, 11:06 AM
just made some calculation for #2
seems like it would be 390$?
30% of 300$ (margin) is 90$ (margin requirement) (For buy cap like MSFT for exemple)
so i would need to lost 61% of my investment to get a margin call
(please share if i am right or not)
Jun 25th, 2012, 01:08 PM
Firstly, I see a few things you need to realize/change:
- your plan of going about things is very dangerous & incorrect. Your position size should not be calculated by total amount of $ you have or the $ amount you are willing to lose until margin call. Your position size should be based on % of total amount you have to play with, then based on risk and reward
- looks like you are not an experienced trader, so do NOT start with margins. Save up some more, then go into stocks. Then, if you are doing well after 50 trades, then think about going into bigger position sizes and use Margin
- you do plan to use stop losses right? So your margin call would NEVER trigger
- do paper trades first, do 50 of them, how did you do?
- given your plan (or lack thereof), I would change all your "invest" words into "gamble". This is not to be mean, but it will put your mind into another mindset
If you do the above, I am 100% sure you will NOT run into margin problems, because you will NEVER exceed your $1000 initial investment. As a beginner and what I learned from my stock school, you should only use no more than 5% of your total amount to begin with. So if you have $1000, then the most you should spend on a stock is (1000)(0.05) = $50. Yes, $50 bucks. This means, you should save up to much more, then go in.
Sorry for not answering your question, but I believe my comments will help you a lot more than telling you "which margin call company" is better. To me, your question is like:
Which gun would cause cause less damage, in case I shoot my own hand when I'm juggling these 2 (loaded) guns in the air?
(yes, people can juggle with 3 live chainsaws, but do they start off doing that? Or do they start juggling with 3 tennis balls first?)