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Anonymous ID:8PlWp69N Sat 24 Oct 2015 16:23:10 No.936026 View Reply Report Delete

Can someone please explain what a maintenance requirement on a margin account is all about? The maintenance requirement is 35% for shorting stock over $15 (RIO). 30% for long stocks (BAC) and 50% for shorting stocks under $15 (VALE).

Lets say I have
>86k buying power (margin)
>41k buying power (non-margin)
>79k total cash balance
>57k total brokerage account value

Positions
>long BAC 320 shares, current value 5,300. Cost 5,000
>short RIO 550 shares, current value -21,000. Cost -20,500
>short VALE 1400 shares, current value -6,600. Cost -10,000

How much more RIO could i safely short if I am willing to be margin called if RIO hits $46?
How much more RIO could i short if I didn't want to use any margin?

I know i should know this shit but I'm a pretty dumb guy.

Anonymous

Anonymous ID:gFzDLDjl Sat 24 Oct 2015 16:35:34 No.936035 Report Delete

Quoted By: >>936138

>>936026
Balls

Anonymous

Anonymous ID:CFNjJokT Sat 24 Oct 2015 16:40:34 No.936037 Report Delete

Quoted By: >>936138

>>936026
Google it

Anonymous

Anonymous ID:mjJLqNBZ Sat 24 Oct 2015 17:09:47 No.936065 Report Delete

Quoted By: >>936138

>>936026
Ask your broker. They have different ways of categorizing margin accounts. I had to talk to IB alot to figure what my amounts meant

Anonymous

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Anonymous ID:8PlWp69N Sat 24 Oct 2015 18:55:48 No.936138 Report Delete

Quoted By: >>936181

>>936035
I hope they don't get chopped off

>>936037
I tried that first. I dont understand if the 35% only applies to borrowed money. I dont understand if i need that 35% in cash. I also dont total understand the difference between my buying power and my total brokerage account value.

>>936065
I use scottrade so i imagine thats going to be quite a pain in the ass.

Anonymous

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Anonymous ID:gJHQ8bpP Sat 24 Oct 2015 20:03:55 No.936181 Report Delete

Quoted By:

>>936138
can't remember how it goes for short sells, but when you buy stocks on margin it goes like this:

Let's say you buy 100k worth of stocks, 50k of it is yours, the other 50k is the broker's.

The value of the portfolio will change for better or worse but the amount you owe the broker will remain a constant 50k no matter what. So in reality, its your own equity that is appreciating or depreciating in value at a much more amplified rate than it would w/o margin.

So your margin started out at 50% because your 50k of equity is half of your assets, but if your equity depreciates, your margin becomes smaller. If the broker set the maintenance margin to 35%, then if your equity depreciated to the point of it only being worth 35% of your assets, you would be required to add more money to the account or get it shut down because the broker doesn't want to risk losing his 50k.

With short selling I think the margin has to do with liabilities and equity

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