I am worried about taxes, thanks for the tip.
I am worried about taxes, thanks for the tip.
please help me understand buying stock on margin...
Stock "X" is $100 per share. I buy 10 shares using margin (which has an interest rate of 8%) for $1000. Meaning I now owe the broker $80 to be paid back I'm guessing when the stock sells?
So, as a day trader, I would need the price of the stock to swing upward more than $85 (including transaction fee) in order to make any money at all on the trade?
I know in order to be a PDT you must have a minimum of $25k in your account, and really you need a lot more due to free ride regulations (that also sucks). So say I have $30k cash in my account (not using margin). I can only buy and sell $5k worth of stock before I have to wait the 3 business days for funds to settle?
Ive gotten to where I am by not taking loans and by not using credit cards so that margin interest rate of 8%, if I am understanding it correctly, is garbage. Ive been paper trading, making $50 here, $75 there...thinking I'm doing good and damned if that aint even enough to cover my interest rate.
I'm starting to see why "The easiest way to make a small fortune day trading is to start with a large fortune."
Stock "X" is $100 per share. I buy 10 shares using margin (which has an interest rate of 8%) for $1000. Meaning I now owe the broker $80 to be paid back I'm guessing when the stock sells?
So, as a day trader, I would need the price of the stock to swing upward more than $85 (including transaction fee) in order to make any money at all on the trade?
I know in order to be a PDT you must have a minimum of $25k in your account, and really you need a lot more due to free ride regulations (that also sucks). So say I have $30k cash in my account (not using margin). I can only buy and sell $5k worth of stock before I have to wait the 3 business days for funds to settle?
Ive gotten to where I am by not taking loans and by not using credit cards so that margin interest rate of 8%, if I am understanding it correctly, is garbage. Ive been paper trading, making $50 here, $75 there...thinking I'm doing good and damned if that aint even enough to cover my interest rate.
I'm starting to see why "The easiest way to make a small fortune day trading is to start with a large fortune."
Just a smidgen when researching other stuff, I dont know much about options either and need to spend some time on both topics. Its on the list right after margin and tax breaks haha.
Margin is using the value of existing securities to expand your purchasing power.
After the last dip in Apple I have a good number of shares I purchased on margin when it dropped below $90 last Thursday. I didn't have the free cash to make the purchase, but I had the margin capabilities of existing stocks/funds.
I can sell today for almost a 4% gain, not bad for 4 days, I'll hold out a little longer, but the interest is adding up daily so I need to balance interest charged versus profit.
Just an FYI, and you must make your own decisions, Target, and WalMart are getting hit hard today. If you are a bad news buyer, this might be an opportunity...
The best info you will find on learning good option strategies is www.tastytrade.com !
WalMart, up over 8% today...
