Do you have a margin account or a cash account? Tim Bohen is covering the pros and cons of each kind to help you decide which is best for you.
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Advanced Stock Trading Tips: https://www.youtube.com/watch?v=OXLs_-PgMUk&list=PLWWz2BSabm3YCZdk7ocrBXGJaLVXXFUYb
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Cash accounts allow you to trade with the amount of money you put into your brokerage account. For example, if you put $1000 in a cash account, your buying power is $1000. A major benefit of using a cash account is that it frees traders from the pattern day trader (PDT) rule.
If you have a cash account, you are not limited to three trades in a rolling five-day period like you are with a margin account. However, most brokers have different settlement periods so they may not settle your cash for a few days.
Most day traders use a margin account because it allows you to buy more stock than you can afford with the cash in your account. Margin accounts also allow traders to short sell.
Different brokers offer different loan leverages for margin accounts. Many brokers will have 2:1, 3:1, or 4:1 leverage. If you're using a broker that's giving you more than 4:1 leverage, you might wanna be cautious using that broker.
For example, if you've got 4:1 leverage, you can buy 4,000 chairs of a $1 stock with only $1,000 in your account. It’s tempting to be able to trade way bigger positions with a margin account.
But remember, margin is a double-sided blade. Margin accounts magnify winners, but it magnifies losers as well. Margin accounts are highly recommended to day traders, especially if you're looking to short and trade momentum stocks.
Always have a trade plan, and cut your losses quickly.
#StocksToTrade #MarginAccount #CashAccount
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
🔴 Subscribe for more free Stock Trading tips: YouTube.com/StocksToTrade
Share this video with a fellow Trader: https://youtu.be/aUzHHKDhihs
✅ Links we mention and recommend:
Try StocksToTrade for 14 Days for $7: https://stockstotrade.com/7daytrial/
Get our FREE weekly watchlist here: https://stockstotrade.com/watchlist
Check out the SteadyTrade podcast: https://steadytrade.com
✅ Recommended video: https://youtu.be/hntoLpKJgJ0
✅ Recommended playlists:
Stock Trading 101: A Day Trader's Guide: https://www.youtube.com/watch?v=G_v3GMkKCjk&list=PLWWz2BSabm3bG64ohfJ-CnnVTjLCWwvei
Advanced Stock Trading Tips: https://www.youtube.com/watch?v=OXLs_-PgMUk&list=PLWWz2BSabm3YCZdk7ocrBXGJaLVXXFUYb
StocksToTrade Software Tips and Tricks: https://www.youtube.com/watch?v=jiTi-chHNyo&list=PLWWz2BSabm3ay_lvQC9JN_1niB78bI7ga
Weekly Trading Recap Videos: https://www.youtube.com/watch?v=_n0XaDt1XFY&list=PLWWz2BSabm3b3-4DcEx98TzNPLAKcq6ES
✅ Follow StocksToTrade on social media:
Instagram: https://www.instagram.com/stockstotrade/
Facebook: https://www.facebook.com/StocksToTrade/
Twitter: https://twitter.com/StocksToTrade
Cash accounts allow you to trade with the amount of money you put into your brokerage account. For example, if you put $1000 in a cash account, your buying power is $1000. A major benefit of using a cash account is that it frees traders from the pattern day trader (PDT) rule.
If you have a cash account, you are not limited to three trades in a rolling five-day period like you are with a margin account. However, most brokers have different settlement periods so they may not settle your cash for a few days.
Most day traders use a margin account because it allows you to buy more stock than you can afford with the cash in your account. Margin accounts also allow traders to short sell.
Different brokers offer different loan leverages for margin accounts. Many brokers will have 2:1, 3:1, or 4:1 leverage. If you're using a broker that's giving you more than 4:1 leverage, you might wanna be cautious using that broker.
For example, if you've got 4:1 leverage, you can buy 4,000 chairs of a $1 stock with only $1,000 in your account. It’s tempting to be able to trade way bigger positions with a margin account.
But remember, margin is a double-sided blade. Margin accounts magnify winners, but it magnifies losers as well. Margin accounts are highly recommended to day traders, especially if you're looking to short and trade momentum stocks.
Always have a trade plan, and cut your losses quickly.
#StocksToTrade #MarginAccount #CashAccount
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
Cash
Cash
after 25k there is no pdt restrictions on your margin account. make it happen!
I’ve had a margin account on Robinhood for several years of Buy and Hold. I love it for instant funding from my checking account and instant proceeds from sales (and never used it for leverage). I just opened a cash account with TD Ameritrade to get around the Pattern Day Trading law and I hate the 3 day delay in funding (especially because it’s coming out of a TD Bank account). I also hate waiting 3 days before I can re-invest the proceeds from any stock sales. I’ll probably convert it to a margin account and limit myself to 6 day trades per week max (3 on each account) and concentrate on Swing Trades.
I'm looking for more clarity on shorting stock on margin.
If you're shorting a stock using a stoploss with say, 1% risk ( 1% of 1:3 leverage, $3000). Isn't the risk limited to $300 if the stop is hit?
What's the best leverage a beginner trader can use?
Thank you for helping me take a decision. I will start with a cash account once im done with paper trading.
Margin
Margin
i hope you understood, my point to make many trades aday ( sell and buy many times , but using my money ) i need the margin to trade many times during day
I'm happy to follow you , my question is , my account is margin and i have 35 k $ , so can i use for example 10 k to trade ( buy and sell many times a day ) does margin mean that i use broker money ) so if i lost stocks , do i use my money or use broker money , ? but as i know i only use 10k , but if i use the while 35 k , am i still in safe area of margin , my point i want to trade with my money only , i do not want to use broker money , also will broker take intrest ? sorry many questions
I made both started with cash account
Cash account currently
PMCC require a margin account or can be done on cash account?
I have a margin account. I funded it with cash and never borrowed more than what I had contributed to the account. My positions all paid in cash by me have gone down with the market. My broker is charging me interest plus they claim I owe them for 70% of the portfolio value. Does that sound right to you?
Cash
Both
I needed a margin account to sell covered calls and other options plays. I rarely use leverage or actively day trade. In light of recent crashes of banks and exchanges (SVB, FTX, etc), does a margin account open me to additional risks over a cash only account during bank runs and failures of my brokerage firm (fungibility of account assets, FDIC applicability, etc)? PS I use Fidelity. Thanks!
cash
Margin.
Hi Tim, great video as usual. I have a Scheab Cash Brokerage Account. Apaet from oit being comission free, Schwab requires 2 days for a trade to settle. What I do to trade everyday is to use half of my account total each day. For example, if my account is $8K on Sunday, and my "settled" funds are also the $8K, on Monday I will only use $4K of the $8K. This enables me to still trade on Tuesdaywith the remaining$4K of the $8K. On Wednesday, the $4K I used on Monday, plus whatever gain or loss on Monday, has settled and I can use that $4K from Monday again now on Wednesday. The same applies to the $4K I used on Tueday, those funds settle and are available Thursday. In turn and lastly, Fridays settled funds are from the funds I used Wednesday. Hopefully this helps. It works for me and Schwab doesn't get to make money off of me.
The broker I use takes a percentage of my cash account and retains it as a margin, so I can't trade the full account. Not sure why they are doing this. I have £900 in the account but can only trade £600 of the £900.
Appreciate the direction and deep knowledge 💯 🙏 👌.
Do you use a cash account or a margin? Just real quick, comment cash or margin. I want to know what most of you are using!