Hey everyone Ross here from where you're trading. So I want to answer a question that you may have? Which is how do I know if a stock is marginal or not? How do I know whether or not I can use my margin to buy the stock. So when you have a margin account, if you put in twenty five thousand dollars, you'll have times four in available buying power. That means you'll have a hundred thousand dollars in buying power.

However, that means you're using your leverage and you're using the margin that's available to you. But the broker will restrict margin on certain stocks. So how do you know which stocks you can use the margin on and which stocks you can't use it on? All right. So let's look in the platform.

So on the Lightspeed trading platform, what you'll notice in the top right hand corner is this a little 25 percent icon. When you see that you know that you only need 25 percent cash on hand to take this as a day trade. So if I want to buy a hundred thousand dollars worth and I've got twenty five thousand cash, that means about her thousand buying power. I Can buy the full hundred thousand dollars worth of this stock and that's for a day trade now.

Overnight margin is always two to one, not four to one. Now if you look at another stock a lower-priced stock, let's see Katie o V This is one today. This is a lower price stock and it says 100 percent. That means the 15 million shares of volume today.

but you can only use your cash equity balance. You cannot use your buying power. Now this account here is an IRA account. I have my equity and I don't have margin I only have I can only use this amount but if I switch over to my traditional account, you'll see I've got the 44 thousand times.

Four is seven hundred seventy five thousand dollars in buying power. but with Kto V I can only use this amount here with Facebook Well I can use all the buying power over here. So generally what I've found to be true this is. You know, a little bit of a generalization is that most stocks below $3 or even below $5 you'll have a little bit of a harder I'm finding 100% or finding that you can use 100% of your buying power and that they're fully marginal.

You'll find some that are Sirius satellite radio here. you can see as of today you can use your your margin on it but a lot of the lower price stocks because they're more volatile because they're more risky. The brokers use a clearing firm. The clearing firm is going to restrict margin on them and it's a risk management measure.

They don't want to have someone you know jump into one of these stocks using all their their buying power only for it to drop fifty percent in one day. and now they've got a margin call. But the way you can tell whether a stock is Marchal or not I'm like to be looking in the top corner just like that. Now other platforms are different and may may have that notice in a different place or may not have that notice at all.

But the nice thing with Lightspeed is you can see it right there so you can know as soon as you pull the stock up. Am I gonna be able to use my buying power or is this cash only and in this case cash only. So I'm a little bit restricted with how many shares I could buy. you just have to be able to plan accordingly.

All right. So I hope that's answered any questions you may have on how do you know if a stock is marginal And as always, if you have more questions, feel free to reach out if you're still watching. You must have really enjoyed that video. So why not subscribe and get email alerts anytime I upload new content.

Remember when you subscribe, you become a member of the Warrior Trading family.