Steve- I didn’t read the whole email chain so I maybe blowing smoke here.
Margin is borrowed money based on a set value of a security. You cannot Margin trade most penny stocks. Margin trading is high risk / high reward. You MUST be careful. A stock that is traded on Margin and rapidly decreases its value you can cause you to be in Margin CALL or even owe the broker if not careful. Buying Power tends to be Margin. According to SEC regulations, a day trader is one who trades / flips five or more times in a trading period. If you are flagged as a day trader you must maintain 25K or more. Holding a security overnight and not bouncing in and out of it prevents this from happening. I believe if your account is flagged, you can wait 60-90 days and request the flag be removed. (assuming you don’t day trade anymore) Those who don’t hold a stock for a year or longer will pay a much, much larger capital gains tax then those who do. Short vs. Long term. Examples of pros and cons… I took a 30K+ loss many years ago when earnings came out and the stock tanked. I had the stock purchased on Margin. Had I not, the loss would have been so much less. I was forced into a Margin call and had to take the large LOSS. This is an example of Margin trading that caused a large loss. During Covid, I invested with Margin into a stock I knew would do well. At the peak, 3 million was made. So this became a perfect case in which Margin trading worked really to my benefit. I had to hold this stock for a year or longer to reduce the capital gain tax. Tyson Burris, President Internet Communications Inc. 739 Commerce Dr. Franklin, IN 46131 Office # 317-738-0320 Cell/Direct # 317-412-1540 Online: www.surfici.net [ICI] What can ICI do for you? Broadband Wireless - PtP/PtMP Solutions - Mesh Wifi/Hotzones - IP Cameras - Fiber - Towers - Infrastructure. CONFIDENTIALITY NOTICE: This e-mail is intended for the addressee shown. It contains information that is confidential and protected from disclosure. Any review, dissemination or use of this transmission or its contents by unauthorized organizations or individuals is strictly prohibited. From: AF <[email protected]> On Behalf Of Steve Jones Sent: Monday, April 12, 2021 1:02 PM To: AnimalFarm Microwave Users Group <[email protected]> Subject: Re: [AFMUG] OT: penny stocks I just dont get it I reset my account to specific cash amount. I dont understand buying power, seems like credit. The one im toying with is RGBP, if someone can look and tell me what thinkorswim is letting me do that the real world wouldnt allow On Mon, Apr 12, 2021 at 11:47 AM Carl Peterson <[email protected]<mailto:[email protected]>> wrote: It is also pretty easy to look like a genius when markets are going up an idiot on the way down. Markets have been going up and up and up for a long long time now. At some point that party will end. On Mon, Apr 12, 2021 at 11:44 AM Carl Peterson <[email protected]<mailto:[email protected]>> wrote: What is often missing from play accounts is often liquidity. They generally assume you can make any trade at wherever the current "price" is. If you are trading VWAPY that might generally be true. Perhaps not for VWAGY. Often not when trending $rando penny stock. On Mon, Apr 12, 2021 at 11:12 AM Steve Jones <[email protected]<mailto:[email protected]>> wrote: im simply not grasping this on the paper trading site, ive made 7500 this morning on 10k i was playing with. thats 11,000 dollars in 2 days of playing around with essentially 10,000 up front. There has to be more to this. i see on my schwab account if i make more than 4 same day trades in a week i get flagged as a day trader and need to have 25,000 in my account or i get a margin call. I dont know what that means, im not buying on margin, it would be cash. assuming that I had actually had 10,000 in my real account, would I really have profited 11,000 in 2 days on 5 trades? (there was some math mistakes made, I made the same size purchase each time, forgetting that the increased price lowered the number of stocks i could get for 10k, but technically the sale would have put enough in to cover the difference) On Sat, Apr 10, 2021 at 4:08 PM Caleb Knauer <[email protected]<mailto:[email protected]>> wrote: It works great, right until it doesn't. If it was that easy then we'd all be wolf of wallstreet. On Fri, Apr 9, 2021 at 10:13 PM Steve Jones <[email protected]<mailto:[email protected]>> wrote: > > So I've been dicking around with the market, trivial amount, 5 shares per > stock. If I had put a lot in Tesco would have done me well. > > I have 100 shares of this penny stock, it's a gold backed cryptocurrency, I > watch it bounce a lot throug the day and its followed the same trend for its > couple months existence. > > So I set up a paper account and was dicking today with another penny stock. > Set buy and sell limits with about 10,000 in the play money. It made 4k in 2 > rounds. It's just a couple pennies it fluctuates but at 500,000 shares that > adds up. > > I told the wife and of course she wants me to cash in something and play with > real money. > > I'm more inclined to see how the play money performs, I have some limits on > the crypto stock that we will see what happens on monday morning. > > I'm thinking to myself there has to be a catch. If it was that simple, > everybody would be doing it. > > You guys who mess around probably went through a time where you tried that > kind of trading, and none of you talk about it now, so I assume the catch is > pretty straight forward. > > I was looking at my IRA, it's done pretty good at 17 percent. But just taking > 10k of it and playing with this at 1 percent per trading day, that would be > another 27k annually. > > I do see why day traders need low latency though, but with limits I dont see > it has a lot of impact. > > What's to stop a guy from spending an hour or 2 every morning with a > relatively small amount in the big scheme of things like 10k trading to 1 > percent or better and then going to work? 100 bucks a day or more doesnt seem > terrible for an hour. > > > -- > AF mailing list > [email protected]<mailto:[email protected]> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- AF mailing list [email protected]<mailto:[email protected]> http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- AF mailing list [email protected]<mailto:[email protected]> http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- AF mailing list [email protected]<mailto:[email protected]> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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