This happened to me when I first started day trading equities about four years ago. Unfortunately back then I was hovering around the $25k mark and would go below often. I did successfully transfer funds between four equity brokers to continue trading. So no, it does not follow you and you should be able to day trade with a new broker. -Rock
Thank you guys for your help. One more question. Should I wait a few days or it would not really matter if I transfer immediately. just curious.
if you are long naked puts or calls you could sell a put or call against reducing your risk and margin
Your question really puzzled me. So if I understand it correctly, you were saying Broker A gave you a margin call for whatever reason. And you asked if you can just transfer the assets from Broker A to Broker B to avoid dealing with the margin call? A margin call is like a note from the broker saying: "Mr Customer. We lend you some money so that you can buy more stocks. But your stocks' value has declined and now it is not enough to cover our risks. We need you to cough up with more money to cover ourselves. If you are not able to come up with more money within X days, we will be forced to liquidate some or all of your positions to cover our risks." If you have an outstand margin call on your account, Broker A may not transfer the asset out of your account until the margin call is satistified.
ok I did not lose money, I actually made money, but the problem was that in the process of day trading, I purchased more shares than my margin day trade account or options buying power amount was for. I sold the shares made the profit, but I was still hit with the day trade margin call. You are referring to the regular margin account whereby the value of the shares you purchase fall in value after you buy them, that is different. This is the buying power of your margin account, whereby I exceeded the buying power. I had buying power of 10K, but i spent 12k, so I would have exceeded my limit by 2K, in my case I exceeded by 23K. Hope this clears this up would you care to share what broker you use too? thanks
If I were you I would not transfer my account. I would liquidate, wire the cash to myself, then wire it on to the next place. Call me cautious. OldTrader
There are maintenance margin calls, which is what you're talking about. This is where your equity declines, and they give you a margin call. Then there are Federal margin calls which are issued when you buy a stock. If you don't have the money in your account, they issue the call. If you don't put the money up, they restrict the account. What would disturb me is that the firm he is dealing with evidently isn't automated enough to block a trade which would result in a federal margin call. I would close this account for that reason alone. But obviously if he wants to continue to trade he needs to close the account and open one elsewhere. OldTrader
Personally I dont think it's worth the trouble of moving to a new broker. T'wer me I'd just sell enough holdings to meet the margin call. If you can do so at a profit consider yourself lucky. I've received lots of margin calls and unfortunately had to liquidate assets at a loss on more than one occasion.