Can you give ONE example where you know it for a fact it happened - without the requisite margin being in place backing such a transaction? Or is this something you just believe to be the case.
Can I trade futures with borrowed money (trading on margin with margin)
- Thread starter B Johnson
- Start date
Extreme leverage is only for the adept, personally far from there.
I wouldn't know the specifics if I hadn't gone through the process myself.
So then you can give us example - specifically?
Newedge would do it assuming you meet the reqs that garachen spelled out for you. I am also fairly certain that a prime relationship with any of the large banks would get you there too. However, don't expect deeply discounted commissions.
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Since we are on the topic of being helpful with regards to margin issues, would you mind elaborating on the process Interactivebrokers autoliquidates positions when there is a margin violation. Specifically, why does IB liquidate an exchange traded spread using the outrights when a more favorable price can be obtained in the tighter native market? You pride yourself on giving customers a price improvement so why is that suddenly not important anymore when you are the one forcing the trade?
You certainly could. Its not any different from any other secured loan (your house is the collateral here), but you will not get this loan from a broker, you need to obtain it from a bank or something.
Resurrecting an old thread. I stumbled upon this via a Google search and i couldn't help but click the bait.
I'm a little confused why everyone seems to think this is only for high status firms/individuals. The way I read the OP, he was asking if he could use funds borrowed against securities (eg. stocks) to post as his collateral for futures. I'm certain this is absolutely possible and I'm pretty certain I've done this myself in the past.
For example, if you are 100% invested in stocks at IB (with a margin account), $0 cash balance, and you submit a buy/sell order on a futures contract, what do you think happens?
A) your order is accepted as long as you have the BP/SMA to cover the withdrawal of cash from your securities account to use for margin in your futures account.
Or..
B) your order is rejected and a message pops up saying "sorry, you're not speshul/wealthy/important enough to open this position, you dirty unwashed poor!"
Maybe OP is asking something else, but that's the way I interpreted his question, and you can absolutely use securities margin to fund your futures margin obligations as long as you remain in compliance with margin policies of both accounts. What am I missing?
I'm a little confused why everyone seems to think this is only for high status firms/individuals. The way I read the OP, he was asking if he could use funds borrowed against securities (eg. stocks) to post as his collateral for futures. I'm certain this is absolutely possible and I'm pretty certain I've done this myself in the past.
For example, if you are 100% invested in stocks at IB (with a margin account), $0 cash balance, and you submit a buy/sell order on a futures contract, what do you think happens?
A) your order is accepted as long as you have the BP/SMA to cover the withdrawal of cash from your securities account to use for margin in your futures account.
Or..
B) your order is rejected and a message pops up saying "sorry, you're not speshul/wealthy/important enough to open this position, you dirty unwashed poor!"
Maybe OP is asking something else, but that's the way I interpreted his question, and you can absolutely use securities margin to fund your futures margin obligations as long as you remain in compliance with margin policies of both accounts. What am I missing?
(trading on margin with margin)
Just reading that part, sounds like what you are trying to do may not end well.
Just reading that part, sounds like what you are trying to do may not end well.
people assume leverage is automatically bad and dangerous.
that’s not always the case. Leverage can be an important part of wealth creation if it’s done right. I would argue that the smartest financial maneuver I ever did for my family is manage my leverage position smartly (and aggressively).