Buying stocks on margin explained - benefits and risks.
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- เผยแพร่เมื่อ 10 ก.ค. 2024
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Have you ever heard the term margin call? Find out why this causes big stock market crashes as investors are stopped out who were buying stocks on margin.
This is a great explanation of the stock market for beginners, along with the risks of margin trading and the benefits.
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Finally you made it so simple with details to fully understand. Thank you so much
Fantastic video and your visual examples were on point!
THANK YOU! Finally a video that shares the important details I've been looking for.
Awesome, this is why we do all this - for these lightbulb AHA moments. Hope we can deliver more, sending you love, joy and happiness - George
This is by far the best video I've ever watched explaining margin!! Thank you sooooooo much!!!!! Subbed
Thank you Latu, super happy to hear this, it's our entire goal. Sending you love, joy and happiness. - George
The table is very clear and clarified doubts.
Dude…you deserve a lot more subs. Thank you
Thanks for the explanation. Nice and clear!
Hey Wagner! Thanks for your feedback and taking the time to support our channel! Sending you love, joy and happiness!
Awesome Video Bro, Well Done. All the videos I've watched make margins seems scary but it's not so bad
Thanks for taking the time to watch and comment! Margin ain't so scary when you use risk management! Cheers
Really did an amazing job at explaining this subject
Thanks for watching. Stay tuned for more valuable trading content!
Great explanation thanks.
Thank you for watching Kevin :)
Good explanation.
Thanks Joe, appreciate your positive feedback and for watching. We got some more awesome stuff coming your way, hope to see you soon. Cheers. - George
I still don't understand make another video explain holding margin account overnight or and how long can you hold stocks bought on margin account
Can a non us residents open a margin account. If yes from which countries and which brokers.
Thanks for making this easier to understand. I now know to stay away from margin trading on my Webull account. I'll stick with only gambling with my own cash.
Thanks for watching!
Does margin apply to selling options
Do we actually own a stock on margin or ur just betting against the price...I looked everywhere but didn't find the answer. Please answer me if u can...thanx
You are borrowing shares of someone who does own them, but immediately sell them to open the short, therefore you are not a stock owner, just a speculator on the price by borrowing other peopels assets. Hope this helps. - George
@tradepro I day trade with margin and I don't see any interest when I stopped out, is it because is wthn the same intraday?
Yes
I have a couple of questions what email
Is best to reach you at?
Hey MrFootyAce, you can send us a ticket by visiting: tradeproacademy.com/about-us/#contact-us-section Look forward to chatting. Send you love joy and happiness.
I am a put seller that likes to avoid assignment. If I were to solely sell puts and never get assigned while using a margin account, would I ever have to pay interest?
Good question, to my understanding you wouldn't. However I'm not 100% sure on the matter. I haven't been paying interest
F margin, im new to trading and after this tanking last week i had to liquidate stuff to cover margin, lost 1200 ...such bs, 5 hours later stock was back up out of margin call, bs
If I'm buying under $25000 on margin do I have to be aware of PDT or limit my margin trades?
you have to have at least $25000 in your account not counting the margin money to do day trading. if your total value (your money) goes under 25k you will not be able to do day trading anymore, it does not matter if your buying power is 48k. 24k your money + 24k on margin
How do you pay it back? Does it pay itself back with profits? Or do you pay monthly installments?
You pay back once you sell the stock , the first thing they do is to remove their money, I think 🤔
@@tosine4luvinochop271 they do. I use margin and pay it down with sell puts.
So say I burrow money, say for example $1000 margin
And suddenly the stocks go down
Let’s say the price of the stock having to be $5.00 when I buy in
But the price drop to $4.85
But, I wait for it to go back up and 2 days later it raise to $5.20.
Do I lose, do I owe, or did I gain?
Am I debt free the moment it returns to $5.00
Or do I still lose money due to the drop that took place before it rose back or above my original buy in price?
Does having the brokerage co. Liquidate tour shares effect your credit score
No it does not, as you are still in a cash flow positive position. If you are negative cash balance after a margin blow out they'll give you a chance to deposit funds to meet the margin call. If you do not, and get left with a debit balance then it affects your credit rating. Hope this helps. - George
@@TradeProAcademy thanks for answer. Your the 1st you tuber to answer a ? For me 👍
@@danielclayton3170 wooohoo thank you sir, that made my day. Have an awesome rest of your day Daniel. - George
Well explained, but, I still didn't understand a thing.
So how come people use margin for OTC?
Margin is a way to buy more of something than you can afford, with the hopes of making a ton of money - at the risk of losing it all with a small move. Not sure if that answers your questions lol. Thanks for watching, appreciate you. - George
@@TradeProAcademy thank you very much for reply. I just understood somehow that margin can not be used for otc. I think I misunderstood something
@@zoiablack5071 Ohh I see, no that's my fault, I misunderstood you. Regulations prevent having margin on penny stocks, which are shares under $5 each. That's because they are so cheap, you can just pay for them in full, there's no need to overleverage in these small companies that move sporadically, it can become very dangerous. So you are correct, small pennies aren't margineable. - George
@@TradeProAcademy thank you:)
here January 27 2021. GME to the moon!! 🚀🚀🚀
We have a morning market update in a few mins, you definitely want to tune it - we'll be discussing this from a pro angle. And also, good work on the trade - just remember to get paid at some point, before the bid evaporates. Sending you positive vibes.
@@TradeProAcademy Thank you, I'll be tuning in
Hello ! thank you very much for the video !!
Imagine that I have $ 1000 in my account and that my broker offers me a leverage of 4:1 so I have a buying power of $ 4000. My question is: if i buy 1000 shares at $ 3 = ($ 3000) and then sell them at the same price can i buy another 1000 shares at 3$ (the same day) , in fact I wonder if I can exceed the $ 4,000 of buying power that I have by buying shares several times in the same day.
for instance : at 10:00am I buy 1000share at 3$ then at 10:01 i sell them. Then at 10:05am I buy 1000share at 3.1$ then at 10:06 i sell them and so on (the same day) I hope you understand me !
You would get flagged as a day trader and will be locked out of your account unless you have 25,000 in the account. Also your broker won’t agree to a margin on a $3 stock it’s too volatile.
@@awesomeray100 Actually you would not be flagged as a pattern trader until more than 4 pattern trades in a 5 day period so anyone can buy and sell a stock in the same day in a 1 week time with no issue. It would be considered a wash sale for IRS and taxed as short term gain on the amounts. Also if your account is a regular brokerage and not retirement account as ling as balance is 25k or more then the pattern day trader rules do not apply. Those rules are for really for small accounts, typically beginner or low income people that should not be investing that way anyhow. As for margin you would need to calculate your rate depending on amount from company based on your income, amount you have invested etc. Usually with margin you can leverage 30 to 60 percent of cost using banks money for a fee and unless you know what your doing and the possible outcomes on your negative end you should not even ever use it. Nice when stock is high chances for increase and low loss. Typically not a good idea for most traders IMHO.
@@awesomeray100 sorry man lol, I re read and saw he said buy/sell several times in a day and u mentioned 25k acct limit. So I was just clarifying details, everything you said was correct as well I just mentioning some details to the guys question. I didnt mean to challenge anything u said tho lol.
skyshark 20 no worries, I’m always up for discussion. Always trying to learn from other people.
It's ok to lose
Unajua sana
1920's all over again!
Yup
Is he wearing a helmet?
Yes I am, a helmet of thick and luscious hair. When you're 40 and bald, the value of the helmet is more easily appreciated. - G
🤣🤣