[Lix]

Hello, have read a few articles on Investopedia and other places about margin accounts. I was hoping maybe an article somewhere would mention this. Maybe it does, I just prolly did not click on THAT particular link. Watched a few people telling stuff about margin accounts on YT but maybe I didn’t click on THAT particular video that talks about this. They all seem to talk about the same thing. Margin this, leverage that, you can make 4x, you can lose a bunch, etc. After all that’s why ppl open margin account. Plus shorting.

Been paper trading for 1.5 years. Not optimistic about losing money. Yet. My reason for thinking about a margin account is being able to trade multiple times a day.

So I open an account. Deposit $30k. 25k goes for the required min balance and 5k goes for my trading purposes. That’s the amount I want to trade with. I don’t want margin. I don’t want leverage. I just want to trade with my 5k.

So I open a position using 5k (let’s be optimistic). I make a trade. I win, say, 150 bucks. Let’s say my fees are $50, so I net 100 bucks.

Question #1: At this point, do they even show you the fees and what your net profit is going to be?

Question #2: Does it mean I can now trade again with $5,100 (assuming a $50 fee from the example above)?

Question #3: If the answer is “yes” to Q2 above, does it mean I will be trading on margin because the funds not settled yet? (Again, I just wanna trade using my 5k + whatever profit I made and not using margin or leverage.) But I was under the impression funds don’t have to settle in a margin account? I am not clear on this.

Question #4: If in the above example, if I were to lose $150 (which would make it $200 including the $50 fee) now I have $4,800 in my account left (above the $25k). If I were to use all the $4,800 to trade again (trade #2) would that be a margin trading?

I guess what I’m trying to get at is how can I trade, or is it possible to trade, in a margin account multiple times a day by not using neither margin nor leverage?

(I read scalp traders can make hundreds of small trades a day. How are they doing this exactly? They have a HUGE amount in their account and they just keep using up small chunks from within their own account without borrowing from the broker? Eg, you put 100k into an account and just trade $1,000 chunks each time?)

Thanks! …and sorry for the lengthy story…

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[Joseph]

Hi Lix, this is a tricky question and I’d be interested to know the answer to it myself.

Have you put this to a broker like Interactive Brokers to see what they say?

I would think most decent platforms these days will show your net P&L if you click into the trade history/details.

I’m not sure on Q2. I would think youre not using leverage unless your position size exceeds your available cash?? I don’t think a broker would charge interest if you’re not borrowing beyond your cash equity, but again I’d put this to them to check.

And I would think similiarly on your last question in that you’re not using margin if your next trade doesn’t exceed $4,800 and you’re not holding trades overnight using your firm’s credit.

But I’ve not beein in your boat so I’d definitely ring a broker up and find an account manager or rep you can talk it through with.

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