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And regulated - you have to be approved for margin trading by the brokerage.
by AdamN 10y ago
And regulated - you have to be approved for margin trading by the brokerage.
- ohstopitu 10y agoI thought it was based on the % you traded? So for example, if I was using an 100k account to trade, I had another 100k of leverage no?
- jerf 10y agoAt least often, yes, but you will also need approval to even get that far. Etrade for instance has several levels of approval. I note that Etrade at least implements it less as "margin approval" and more as "advanced mode"; to do any sort of options trades, even the ones that don't require margin themselves, requires you to activate the "margin feature" on your account.
- jonknee 10y agoRobinhood makes you accept a new agreement to be in Gold which sounds about the same as getting margin approval at a brokerage (agree to the risks and approval is automated). They don't have special powers to waive regulations.
- dsacco 10y agoIt depends on the brokerage. There is Reg T. margin and then there is portfolio margin (the latter has significantly higher capital deposit requirements). It also is not a straight 1:1 ratio. You generally can't go absolutely nuclear with leverage unless you have portfolio margin. Typically, brokerages will require collateral in the account equal to the risk (for defined risk strategies) and you will need a higher trading clearance on your account for unlimited risk. Your buying power is a function of how long the trade will be held as well as the risk profile.
- rbcgerard 10y agoSee below http://www.finra.org/sites/default/files/Industry/p122203.pdf http://www.finra.org/sites/default/files/Industry/p122203.pd...