Highest Possible Stock Leverage

Discussion in 'Trading' started by Painkiller, Dec 28, 2006.

  1. This might sound crazy, but I have a friend who claims that Smith Barney extends him 10x leverage on his equities account as long as he does not keep his positions open over the weekend.

    Does this sound right to anyone else?

    What is the highest possible amount of borrow you can get with stocks?

    I was under the impression that the SEC allowed no more that 50% of the value of your equity to be margined?

    I am not talking about stock futures or options, I just mean straight ahead stocks.
  2. Never heard of that.

    Your friend has balls of steel. Holding that over the weekend would mean a 10% drop wipes him out... crazy talk I tell ya :)
  3. I don't think he has ever actually used it; he just claims that he thinks it is available to him if he wants it. I just wondered if anyone alse has heard of a broker allowing 10:1 leverage for stocks.
  4. Retail accounts are limited by government regulated margin amounts (Reg T). Proprietary acccounts though can be what ever the firm wants to give you. 10, 20, even 50:1 leverage overnight is possible depending on the strategy, experience level and capitalization of the account holder.
  5. I think I had smth like 20:1 overnight and over 200:1 for intraday at one point. But I was never abusive of it, I was pretty safe with overnights. And I was in a LLC group, not direct with the clearing firm.

    With a track record, many prop firms get very generous with leverage. It's all negotiable.

    With the top B/Ds getting into clearing & daytrading business, they are sure to do the same.

    Retail and prop are almost the same thing now. As long as someone's money is backing the total leverage, it's all good.