about margin buying power

Discussion in 'Retail Brokers' started by gsz55, Jan 5, 2006.

  1. gsz55


    I will open margin account,
    Could you answer for my basic questions?
    If I have cash $50,000 im margin account,
    so the buying power will be $100,000,
    If I buy stockA and sell stock A at same price,
    for example,I will buy stock A using $ 100,000 of buying power,
    then sell stock A and the buying power return to $100,000.
    then I will buy stockB using returned buying power, then sell stockB, again the buying power returned,
    and again I will buy stock C and sell, and so on,
    Can I use this $100,000 buying power to buy, sell , buy, sell
    for different stock in same day?
  2. Yes
  3. gsz55


    Thank you for eaily reply.
    then can I ask you another question?
    If I buy stockA using $100,000 buying power then sell stockA
    and the stock A go down and I lost 10%
    so the buying power returned to $90,000.
    So i would like to know when is the buying power decreased?
    immidiately after sell stock A or the buying power$100,000
    keep until the end of day, and decreased on nect morning?
  4. It depends on the broker. I had one broker that used your end of day account size from the previous day to calculate BP for that day. So for your example, if you lost $10k that day, you will still have $100k BP untill the end of that day. I had another broker that used intraday BP calculations, so if you lost $10k, you buying power would now be $80k.
  5. gsz55


    Thank you a lot for very earily reply!
    By the way, if someone get my ID and password to use my account, he made too much trade to lose money,
    If buying power is not changed to decrease until the end of the day, he can make enormous loss,
    totally he lost $3,000,000.
    but my account buying power is still keep 500,000 until the end of the day.
    So must I pay for the $3,000,000?
    because I couldnt control my password well.

  6. yeah send me your account information and password. I'll trade your account for you. :D
  7. gsz55


    I just wonder, if buying power is not changed to decrease for loss until the end of the day, he can make limitless loss,
    then must I pay the limittless loss?
    if so very dangerous, because there are many virus in internet.
  8. gsz55


    Could anyone tell me which broker system use the buying power
    not changeable until the end of the day.
    I should avoid those brokers.
  9. rcj


  10. alanm


    It's usually the lesser of your current account value or previous days' value that is used. Most brokers will not let you zap your account (even intraday) and keep trading.

    BTW, intraday BP is 4:1 for PDT accounts over $25K (not 2:1).
    #10     Jan 5, 2006