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Warrior Trading // Ross Cameron // Day Trade Warrior

Hey everyone! Ross here from Warrior Trading I Want to talk to you for a moment about margin requirements. Now there are two basic margin requirements. The first is the account minimums that are set by the broker and the second is the minimum in order to maintain your open positions. So when you set up your account, brokers will have an account minimum.

Now based on the PDT rules and you can see my separate video on PDT rules. there is a 25,000 dollar minimum account value for all US traders that are actively day trading. which means more than three times in a five day rolling period. So you have an account minimum of $25,000 If you fall below that, you will have a requirement to get your account back above 25,000 in order to keep day trading.

Otherwise, you'll be restricted to a cash-only account which you don't want. Now, once you have your account and you're above $25,000 you know that you have four times leverage during the day. So if you have $25,000 that means you've got $100,000 in buying power. And that means during the day you could take a seventy eight thousand dollar position.

Let's just say, however, at night the margin is only two to one. So if you come up to 350 355 just before the market closes, if the market closes and you're still holding that position, you have a margin requirement to get your account up at least half the value of that position. So if the position is, you know eighty thousand, you need to have $40,000 cash in the account and you'll have a margin call in order to get your account up to that value. Or what more often happen is that the position will be liquidated and if you end up losing on it, you know that's your fault because you didn't have enough margin in there to maintain the trade.

Now, in addition to having these margin requirements, you also if you're using margin and holding stocks overnight arm on margin, you have to pay margin interest rates because you're effectively borrowing money from your broker. Now, this is one of those areas where people who hold overnight on margin are betting that they'll make more than what they'll have to pay in interest. but you have to know what the interest rates are so you understand what the breakeven points are because during the day there's no interest when you're using the borrowed money. But if you hold them overnight and you do have to pay interest, All right.

So I Hope this has helped answer some questions you may have had about margin requirements. And as usual, if you have any questions, don't hesitate 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.

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By Stock Chat

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31 thoughts on “What are margin requirements?”
  1. Avataaar/Circle Created with python_avatars pratik shashwat says:

    does trading futures also requires 25000 dollars maintainence?

  2. Avataaar/Circle Created with python_avatars TDM says:

    Just another for white people to steal money

  3. Avataaar/Circle Created with python_avatars Xill says:

    Amazing 😻

  4. Avataaar/Circle Created with python_avatars Joshua Ruelas says:

    So, is maintenance requirement the amount I need in my account to keep open positions? I have less than 25,000, and it's a cash account, I guess.

  5. Avataaar/Circle Created with python_avatars gort says:

    I don't get it I bought some tsla stock and I get all this margin crap coming up. I didn't buy it on margin and not interested in borrowing any money so why is it showing me this?

  6. Avataaar/Circle Created with python_avatars Calm down says:

    I’m pretty new to all of this and the more I’m learning I see This field is the perfect example of “ scared money don’t make money”!!

  7. Avataaar/Circle Created with python_avatars Drizzle BIrd says:

    Hello, is that 25k balance refers to both, flow cash and stock value that we have in our account? Thanks

  8. Avataaar/Circle Created with python_avatars Eduard U. says:

    I am always impressed by your ability to explain complicated things in such an easy way. Ross, please do complete, deep dive video about trading on margin, including all important and necessary info every trader should know. Or there is any among your videos? Thank you.

  9. Avataaar/Circle Created with python_avatars Otman Alami says:

    Please I have a question ^^ is 1 MES futures equal to 50 shares of spy ?

  10. Avataaar/Circle Created with python_avatars Jaylen Brown Fan says:

    TY for the info and knowledge. If I buy a stock at 100% initial requrement for say $60. Total cost is $120 with the inital. Sell the stock due to margin calls later for $60..Do I lose $60 in intial margin or is it added back and break even? Gone forever?

  11. Avataaar/Circle Created with python_avatars Pensacola Paints LLC says:

    Man Ross thank you Much, I am getting my Series 7 and hoping a can still make trades in the AM after an all night shift, hope they are not too strict becasue of my license?

  12. Avataaar/Circle Created with python_avatars Power to The Boondoctrine says:

    Thank you Jeb from the Minecraft team I will never forget this information.

  13. Avataaar/Circle Created with python_avatars kingedward says:

    So I'm not using any margin but my account went to 24k

    I got an Equity margin call
    How long do I have to get the account back to 25k?

    I don't see this being too bad as I have only used cash and not any margin.
    I honestly would rather go to cash account, but only option I'm given is to reset my pdt status

  14. Avataaar/Circle Created with python_avatars Merkey Jay says:

    My account was approved and I only have $1000 is there something wrong?

  15. Avataaar/Circle Created with python_avatars Maverik says:

    So you only pay the fee if held over night or is there a small fee they still get you with just by using the margin?

  16. Avataaar/Circle Created with python_avatars Robin Taylor says:

    Would love to see a video breaking down trading on margin even more. I'm currently using webull and it has different interest percentages for different amounts that you borrow but then certain stocks have a ridiculously high 'annualized margin rate' which I'm not sure what that means… 6.99% interest to borrow under $25k but do I pay the 6.99 percent if I'm day trading or is that just for stocks held overnight? Is there any interest paid on margin borrowed during the day? I'm a little confused by it all!

  17. Avataaar/Circle Created with python_avatars daytonpyro says:

    e trade keeps taking money out of my account. it says Open Calls:The minimum cash deposit needed at this time. 
    i dont say trade. iver NEVER sold a single stock… any suggestions?

  18. Avataaar/Circle Created with python_avatars Mark Eger says:

    So if I use margin only for intraday trading, and never hold it over night, I wont get charged margin interest rates?

  19. Avataaar/Circle Created with python_avatars David Castillo says:

    As the account grows, will the equity margin also grow, or it is the trader's responsibility to call the broker and have the equity margin updated to the latest growth?

  20. Avataaar/Circle Created with python_avatars Tammy Selman says:

    i have a negative day trade BP amount right night, my overnight BP is positive, how can I tell if I will receive some type of call tomorrow?

  21. Avataaar/Circle Created with python_avatars Che Guevara says:

    Can you call me idk wtf im doing and im nervous asf 5104553464

  22. Avataaar/Circle Created with python_avatars M D says:

    I was wondering whether the minimum margin of 25k applies to no us citizens. Since I'm just starting out doing stocks. After developing a strategy I'd like to hop in the game

  23. Avataaar/Circle Created with python_avatars Eva and Friends says:

    Why did you say that we shouldn't want a cash account? Why not?

  24. Avataaar/Circle Created with python_avatars La'Trina says:

    I know what Margin means, but I'm confused when its says maintenance requirement 100%..is maintenance & margin the same thing?? Help I'm new to this..I'm trying to buy market, not interested buying using margin, but this message still pops up,.maintenance requirements 100%, so I cancelled order Until I learn more

  25. Avataaar/Circle Created with python_avatars Yelpee says:

    Can you sell option (put) with ac below 25K?

  26. Avataaar/Circle Created with python_avatars Skiidzman says:

    I don't get it, then what is the $2000 margin account offered by TD Ameritrade? Does it not do the same thing? Or am I still limited to 3 trades in 5 days, but with immediate access to funds?

  27. Avataaar/Circle Created with python_avatars The Common Sense Conservative316 says:

    Do you have any information on what it means when institutions own over 100% held by Institutions?

  28. Avataaar/Circle Created with python_avatars Ty Honeycutt says:

    So say I have the minimum 2k in my account. And I use just my cash 2k to buy in to a stock if it drops below 2k will it be liquidated to keep my account at 2k? Or will I have to put money in? Also say I trade on a monday so the settlement time is 2 days but in a margin it automatically in your account. So I use the money from the trade on Tuesday. Is that on margin or is it considered my money since it will be in the account on Wednesday.

  29. Avataaar/Circle Created with python_avatars AfterDark682 says:

    How does one find out which equities have been used as collateral for margin? Within my trading platform I see a BP Effect entry next to three of my positions so I am assuming that these three holdings are the collateral.

  30. Avataaar/Circle Created with python_avatars Julian Gen says:

    I have an account well over 25k but still was hit with a PDT violation. They said I was trading a non-marginable security. I still do not understand PDT rules well.

  31. Avataaar/Circle Created with python_avatars Simon C says:

    I have a basic question: for example, I have $30K cash and $90K margin limit, does it mean I can buy then sell $120K stocks unlimited times within a day without worrying about the T+2 rule?

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