I made a mistake in this video. At 2:30 I say that the account was now worth $12,250. What I should have said was that it was worth $12,500. And to make it even crazier. I did the rest of the math correct as if I had said the correct $12,500 the whole time. I apologize. It should have been 12,500, not 12,250. Oops!
And what if I tell you I was completely fine with the $12,250 and actually carried on with the example as if it’s a $12,500! Hahahahahaah no worries buddy it was a greatt explanation! Cheers
I had literally zero percent knowledge about any of this terminology or processes 5 minutes ago, and this was an extremely clear explanation that I don't feel the need to watch another video on this exact same thing
Excellent Presentation, very clear explanations and you highlighted when interest is paid which is when you have a debt to the broker. This is probably the best you tube video on Margin, Margin Call, Maintenance Requirement. This is a channel worth subscribing. Very good work!!!
Mistake or not video explains in simple terms what investing on margin and margin call is. Excellent. Now I understand the old saying "the only tip you can count on from you broker is a Margin Call"
For those that are wondering how is the margin call price determined, it is initial stock purchase price x ( (1-initial margin) / (1-maintenance margin))
Thank you, this is the best explanation I've been able to find on this topic. All the others talk about using 10x your investment as margin. To me they just seem like Russian roulette tutorials.
You make wonderful videos! 👏 Just a small off-topic question: 😅 I only have these words 🤔. (behave today finger ski upon boy assault summer exhaust beauty stereo over). What should I do with this? 🤷♂️
I am a new to the trading world. I have a question. I have an account deficit balance but I have never used or turn on the margin investing why I have account deficit? I asked some of the agent, but they asked too much personal information. Can it be trust? What question can they as to identify me?
Great video my man! Can you use stocks you already own within the account instead of cash to meet the initial margin requirement ? In the video, you say he has $5000 “cash” and wants to invest in XYZ....what if he has $5000 in XYZ stock and wants to buy $5000 more and has no cash? I realize it says “buy more stock with that stock as collateral” above him but it’s not mentioned...Thank you for your patience!
So when we recieve the margin call, does that mean that when we put extra money into the account, will it just stay there for the broker to cover up his investment, or wit will actually be invested in shares?
I watched this because I saw this morning the following headline and wanted to understand what was happening: "Coronavirus Could Trigger Mortgage Market Crash as First FDIC-Insured Bank Falls" and "Mortgage holders could be in trouble as the first FDIC-insured bank falls in West Virginia." High-risk mortgage notes are vulnerable to being called, which would make mortgages due in full immediately. "When a bank’s assets get transferred to another institution following a bankruptcy or forced closure by state regulators, mortgages are turned over to another bank or investor. In such cases, the new lender can “call in” mortgage notes they find to be risky, making mortgage payments due immediately.
do you get margin maintance back , say you have to add $ to cover maintenance so you add 100$ say the stock goes back up , do you get that 100 back in your account or you just owe less margin?
I have one question. Why if I didn’t borrow a cent from my broker and every single money used is my personal money deposited into my stock account but I still got margin call?
So it's the minimum percentage of the value of your position minus the loan over the value. Anything less, you'll have to pay up to reach that minimum percentage. If not, shares will be sold with the loan subtracted and now you're at a significant loss.
Stupid question: In your example, why can't the maintenance margin requirement just be 0%? Let's consider an example: Initially, Stock value per share = $1 Initial Margin Requirement = 50% Total shares to be bought = 10 000 My investment = $5000 Broker loan = $5000 My total portfolio worth = $10,000 Stock plummets to $0.5 My total portfolio worth is $5000 Now, the broker can still take back the loan they gave to trader by selling all his 10 000 shares. In this case, maintenance margin requirement = (my share of portfolio)/(Total worth of portfolio) = $0/$5000 = 0% What is the point of having a margin requirement bigger than 0% if they are always going to take the $5000?
Gambling is one thing. Gambling with the idea that your information is twice as good as the markets information is another. Because that's the only way doubling your risk makes sense.
For sure, in fact the default way to invest is to buy with the cash you have in the account. You can only use margin if you apply to have a margin account
To use your example, when the market drops 25%, Margin call is triggered as 33.33%< 35% maintenance Margin. How much cash are you required to deposit to satisfied the margin call? 5K ?or the difference between 33.33% to 35% which will bump up the % to 35% ? thank you ! great contents by the way
I have a suggestion. I'm in my masters program. Reading the book. Financial management for nurse manager ch3pg 58. I'm not understanding when hospitals work on margin. And predictor of closing and cas to debt ration. 😢 Can you make a video explaining that 🤔. Please. You're the best.. for all the nurses who are taking MBA classes.. 🎉 thank you for your time
I made a mistake in this video. At 2:30 I say that the account was now worth $12,250. What I should have said was that it was worth $12,500. And to make it even crazier. I did the rest of the math correct as if I had said the correct $12,500 the whole time. I apologize. It should have been 12,500, not 12,250. Oops!
Had to scroll to the comments to see if I was going crazy here. Glad to see it's the first comment!
I thought you paid the broker his comptions 250$😂
And what if I tell you I was completely fine with the $12,250 and actually carried on with the example as if it’s a $12,500!
Hahahahahaah no worries buddy it was a greatt explanation!
Cheers
Almost made me think i was going crazy lol
The explanation was very great though. It helped me understand. We are human by the way
Honestly, you could not have explained this in clearer terms. Excellent.
You would be surprised how many videos I went through to get a simple explanation on this. This video was great.
This was exactly the video I was looking for!
Well explained!
I had literally zero percent knowledge about any of this terminology or processes 5 minutes ago, and this was an extremely clear explanation that I don't feel the need to watch another video on this exact same thing
The BEST video on margin call tutorial.
I gotta say...
I love this channel. Been learning quite a bit.
Excellent Presentation, very clear explanations and you highlighted when interest is paid which is when you have a debt to the broker. This is probably the best you tube video on Margin, Margin Call, Maintenance Requirement. This is a channel worth subscribing. Very good work!!!
This is the best video I've seen on how margin works. Very clear explanations and examples. Well done!
Back to the basics I see. You explained this well!
Thanks John, I appreciate the support
@@LearntoInvest That's a great explanation.
Thank you for a super clear description and examples of investing on margin!
The best explanation of Margins I have seen. I now understand it better. Thank You!!!
Mistake or not video explains in simple terms what investing on margin and margin call is. Excellent. Now I understand the old saying "the only tip you can count on from you broker is a Margin Call"
Watched many videos about this but this one actually made it clear enough for me to understand! Whoop whoop 🙌🥳
this is so clear, way better than textbook
Never saw anyone explaining IM so well. Thanks a lot!
Gosh! I love you for this explanation ❤❤❤😂
Wow...this was a really quick explanation.
I am here because of GME AMC... Great explanation, now I understand what is going on!
You are so good at teaching! Thank you!
What an explaination...at the end of the video..I literally said "WOW" loudly! love love it
The clearest explanation out there.
Watched a few videos and this is by far the best explanation. Thank you!
Amazingly well done! Answers everything, thank you!
Wow, thank you for the clear and concise explanation of this!
Thanks for this amazing explanation
this channel is pure gold.
As easy to comprehend as it gets, thanks!
best explanation I've heard! Thanks! We need more videos like this.
For those that are wondering how is the margin call price determined, it is initial stock purchase price x ( (1-initial margin) / (1-maintenance margin))
Wow this the best explanation so easy and clear
Very clear! Thank you!
Awesome, I just liked the examples and that made it super clear to me, thanks boss
Simple and beautifully explained. Thanks for making this vdo.
Im currently on margin call on one of my funds so thank you for the very Clair explanation
Thank you, this is the best explanation I've been able to find on this topic. All the others talk about using 10x your investment as margin. To me they just seem like Russian roulette tutorials.
Likewise. I enjoyed this video .
Very well explained. Thank you 👌🏼🌸
Thank you for such a good explanation!
Thank you for the direct and easy explanation
Thank you! Subscribed!
Thanks. Great video
You make wonderful videos! 👏 Just a small off-topic question: 😅 I only have these words 🤔. (behave today finger ski upon boy assault summer exhaust beauty stereo over). What should I do with this? 🤷♂️
Thank you so much for the video! Helped a lot!
Well explained !
From Paris
Such a great video
Nice work buddy
Thanks for the vid. Clearly explained
I am a new to the trading world. I have a question. I have an account deficit balance but I have never used or turn on the margin investing why I have account deficit? I asked some of the agent, but they asked too much personal information. Can it be trust? What question can they as to identify me?
Great video my man!
Can you use stocks you already own within the account instead of cash to meet the initial margin requirement ? In the video, you say he has $5000 “cash” and wants to invest in XYZ....what if he has $5000 in XYZ stock and wants to buy $5000 more and has no cash? I realize it says “buy more stock with that stock as collateral” above him but it’s not mentioned...Thank you for your patience!
So when we recieve the margin call, does that mean that when we put extra money into the account, will it just stay there for the broker to cover up his investment, or wit will actually be invested in shares?
It will stay there for the broker as far as I know
I watched this because I saw this morning the following headline and wanted to understand what was happening: "Coronavirus Could Trigger Mortgage Market Crash as First FDIC-Insured Bank Falls" and "Mortgage holders could be in trouble as the first FDIC-insured bank falls in West Virginia." High-risk mortgage notes are vulnerable to being called, which would make mortgages due in full immediately. "When a bank’s assets get transferred to another institution following a bankruptcy or forced closure by state regulators, mortgages are turned over to another bank or investor.
In such cases, the new lender can “call in” mortgage notes they find to be risky, making mortgage payments due immediately.
Great explanation 🙌🏼
do you get margin maintance back , say you have to add $ to cover maintenance so you add 100$ say the stock goes back up , do you get that 100 back in your account or you just owe less margin?
I have one question. Why if I didn’t borrow a cent from my broker and every single money used is my personal money deposited into my stock account but I still got margin call?
That's a good question, it shouldn't happen that way... Any chance you could tell me what happened?
Glad to know Jordan Peterson teaches finance now. :)
😹😹😹😹😹😹😹
How is the interest on the margin loan paid and how often?
Great explanation.
So it's the minimum percentage of the value of your position minus the loan over the value. Anything less, you'll have to pay up to reach that minimum percentage. If not, shares will be sold with the loan subtracted and now you're at a significant loss.
Very clear explanation!
No to me its not
Do you het a Margin call after a 0 equilaty or after a 0 available money to invest
Stupid question:
In your example, why can't the maintenance margin requirement just be 0%?
Let's consider an example:
Initially,
Stock value per share = $1
Initial Margin Requirement = 50%
Total shares to be bought = 10 000
My investment = $5000
Broker loan = $5000
My total portfolio worth = $10,000
Stock plummets to $0.5
My total portfolio worth is $5000
Now, the broker can still take back the loan they gave to trader by selling all his 10 000 shares.
In this case, maintenance margin requirement = (my share of portfolio)/(Total worth of portfolio) = $0/$5000 = 0%
What is the point of having a margin requirement bigger than 0% if they are always going to take the $5000?
Gambling is one thing. Gambling with the idea that your information is twice as good as the markets information is another. Because that's the only way doubling your risk makes sense.
Well explained! Thanks!
Thanks bud!! explaned well
Is there a way to automate this and just transfer the money to the margin account from an account i have with broker when my maint margin % falls 35%?
What if I don’t want to buy on margin? I just want to buy the entire share by myself with my own money. Is that possible?
For sure, in fact the default way to invest is to buy with the cash you have in the account. You can only use margin if you apply to have a margin account
Very clear, thanks
Good explanation..bravo
I appreciate this video, it helps me a lot.
thanks for the knowledge man!
12,250 or rather 12,500?
Yes, that was a mistake. The rest of the math is correct though 🙂
excellent explination. thank you
Amazing explanation!
thoroughly explained
Thanks for this well explained video
So would using margin be dumb for long investments
Can you pay off the margin debt at any time or only when you sell?
nice one
Does margin call happen at the end of day, after the market close?
What is the difference between a margin trade and using leverage?
what does the broker earn from this ? 4:54 if you lose money, your broker is only paid back the debt owed. why would they broker ?
they get interest on the loan
Where is interest calculated and how often is it typically compiled
well John, that's a real big tie you got there
Thanks. Very clear.
But how the broker benefits?
Sir why brokers give margin?
What is the benefit of the margin that broker gives to their clients.?
Can 'margin' trade applies to buy or sell?
Excellent!!!!
How long do they give you to make the payment?
Excellent
To use your example, when the market drops 25%, Margin call is triggered as 33.33%< 35% maintenance Margin. How much cash are you required to deposit to satisfied the margin call? 5K ?or the difference between 33.33% to 35% which will bump up the % to 35% ? thank you ! great contents by the way
I rewatched it again, and noticed that you have addressed the question I asked above in the video.
Does margin mean the loan amount or the equity in your account?
i was looking for this to understand the movie.
I have a suggestion. I'm in my masters program. Reading the book. Financial management for nurse manager ch3pg 58. I'm not understanding when hospitals work on margin. And predictor of closing and cas to debt ration. 😢
Can you make a video explaining that 🤔. Please. You're the best.. for all the nurses who are taking MBA classes.. 🎉 thank you for your time
Waw! Very well explained. 👍
this is relevant today.
Thank you
So a lower % maintenance margin is better?
Clearly done.
Regrettably, due to a system error, the transaction was erroneously sent to an invalid email address.
Hi Jimmy, u rule...great explanation!
you're a legend