who uses margin

I have only been trading for about six months, but was thinking about applying for margin. Do most people trade on margin or not ect... what are the benefits expect the obvious,and the pittfalls. opinions appreciated


wake

 

I would imagine that everybody here uses margin. Get the margin account and ease into margin trading when you feel comfortable.

 

uhm... benefit is you get more leverage... you effectively amplify your gains. Downside is you also amplify your losses and you have to pay interest on the barrowed margin

 

Can't short without a margin account.

 

Also, no unsettled funds to wait for in your margin account.

 

you can't even day trade without a margin account ... at least not if you are with IB

 

Margin can be a savior or kill you just as fast. Its a great tool short term trade- but if you buy and hold and max out your margin and the market corrects watch out you can wipe your own money away really fast. Then you have the margin dept callin you at the settle of every day asking you for money.. if u dont have the money they sell double if not triple your shares at the bottom. i learned the hard way many years back..