GREY:XEBEQ - Post by User
Comment by
tamaracktopon Nov 29, 2020 1:53pm
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Post# 31997010
RE:RE:Put it this way.
RE:RE:Put it this way.Unfortunately that's not the case. You cannot use stocks held in a registered account to pledge as collateral for positions in a margin account.
To put it simply, if a stock has 25% margin value, you wold have to deposit 75% of the cost of your purchase at the very minimum, in your margin account. If you cut it too close you run the risk of a margin call.
If you bought 1000 shares at $5.80, your debit is $5,810 after commision. You would have to put up $4,360 bare minimum. If the stock dropped to $5.20, just to pick a number, you would have to deposit another $150 to cover your margin call. If the stock goes back to $5.80, you can withdraw the $150 again.
The real danger here, and I can't emphasize this enough, is that if the stock closes below $5, it may not qualify for margin anymore, in which case you would have to pay your entire debit, or sell all you shares and cover your loss, or do a little of both.