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I was just wondering how much of their available margin traders use. A little or a lot or none

2007-12-30 15:26:44 · 4 answers · asked by Mark S IV 3 in Business & Finance Investing

4 answers

I think very few traders use their available margin to borrow money (i.e. to buy or margin) but I think a lot of traders use margin regularly to take short positions in either stock or options.

I would guess that most of the time I am using something like 10% of my available margin due to short positions, but I am not a very active trader.

From their comments on message boards I am pretty sure some other more active traders use a lot more more of their available margin, maybe 30%-50%.

2007-12-30 16:23:54 · answer #1 · answered by zman492 7 · 0 0

Every trader I know very rarely uses the margin in the trading account.

There aren't any gifts on Wall Street.
The broker charges interest on the margin money when its borrowed.

When a trading account is properly managed, there isn't any reason to use the margin.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

2007-12-30 23:35:17 · answer #2 · answered by Ron Berue 6 · 0 0

I am currently using 60 percent of my margin, because I had all my money tied up in AAV paying a 12 cents a month dividend, used to be 15 cents a month. I bought at ten and its now 8.70 after dividend cut. So I bought a preferred stock, at 22.75, XFR, thats Bristol Myer Squib, and will be paying a .78 cent dividend in January using my margin.

2007-12-31 00:45:43 · answer #3 · answered by Anonymous · 0 0

Margin is used very, very, very judiciously. Most who use too much lose it all over time. Very rarely I see an opportunity I cant pass up and am full invested, I will consider using margin in this case but usually will not. Using borrowed money to invest is a dangerous game and most trader know this.

As mentioned above there are no gifts on wall street. I try to only buy what I can afford, and afford to lose.

2007-12-31 11:16:14 · answer #4 · answered by eric c 4 · 0 0

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