Can I trade futures with borrowed money (trading on margin with margin)

B

B Johnson

Hey guys, I haven't been able to find a clear-cut answer to this... I understand futures margin is different than margin that one uses to buy stocks. Maybe you can help clear this up...

I would like to borrow an amount of money equal to my account cash balance. Therefore, I have twice the buying power in the futures market. However, I do not want to day-trade. I understand that I can have 4x the buying power if I day-trade, but can I have additional buying power even when I'm not day-trading futures? Basically like a secured line of credit... or can I only use leverage one way (i.e. futures margin deposit)?

To sum it up: Can I use borrowed (directly from brokerage firm) funds as my initial margin requirements for overnight futures trading?
 
B Johnson said:
Hey guys, I haven't been able to find a clear-cut answer to this... I understand futures margin is different than margin that one uses to buy stocks. Maybe you can help clear this up...

I would like to borrow an amount of money equal to my account cash balance. Therefore, I have twice the buying power in the futures market. However, I do not want to day-trade. I understand that I can have 4x the buying power if I day-trade, but can I have additional buying power even when I'm not day-trading futures? Basically like a secured line of credit... or can I only use leverage one way (i.e. futures margin deposit)?

To sum it up: Can I use borrowed (directly from brokerage firm) funds as my initial margin requirements for overnight futures trading?
More...

So you want to trade with other people's money?

Ever thought what would happen if you wipe out your account?

From your question I already think you will indeed wipe it out fast.

Trade only with money you can afford to lose. This excludes immediately the use of borrowed money.

Margin is already a leverage, and you want to leverage the leverage?

Why do you think they give no smaller margins? Maybe because it might be risky?

First try to make money, and don't worry f it really works you will be only a bit later millionaire. If it does not work out at least you will not pay all your life for money you lend.
 
You can't borrow money to trade options, futures or futures options.

Question for you:

You've basically been given "the power of Thor" and it's still not enough?
 
Many times in order to exploit price differences you lever up yes.... Of course if your risk management isn't good then its the perfect blow up recipe
 
Okay your confusing Stock/Options and Futures trading, different things, different accounts.

Stock and Option, require a normal brokerage account, 2x's margin accounts over $2000 so that's your account doubled, not day trading so fine, want to close out positions same day often then you'll need 25K+ then the 4x's Margin only for intraday traders over night still 2x's over night for none day trades.

Futures, Margin on these accounts is huge, 50x's or more.

You need 2 accounts, 1 Stocks/Options and the other futures for day trading IMHO!!
 
You can borrow money to trade futures. It's called margin financing. It's reserved for large clients who have a long history and large account balance. It's meant to overcome specific margin issues not give more risk to already risky accounts.
 
You must log in or register to reply here.
Back
Top