Can I trade stocks without any broker ? How much money I need to open my own clearing firm ?

[thecoder]

Lol, and now you are comparing futures to stocks ...

Your argumentation gets idiotic, man.
In that example with futures you control more than 10x the stock than buying the stock upfront.

 

[DevBru]

Your argumentation gets idiotic, man.

I asked you for an example and you can't even provide one.

Instead you compare stocks to futures and provide an example from a broker providing a loan to its client.

You have no idea what you are talking about.

I give up.

 

[thecoder]

A typical loser's reaction, instead of admitting his logic error.

As said it's not about the client, but about the broker itself (ie. client wants establish his own brokerage firm, wants to become a broker himself). See the topic of this discussion!

 

[DevBru]

A typical loser's reaction, instead of admitting his logic error.

As said it's not about the client, but about the broker itself (ie. client wants establish his own brokerage firm, wants to become a broker himself). See the topic of this discussion!

Give an accurate example or shut your mouth ...

And do not dare to give the Kraken website as an example yet again since it not applicable to your situation if you where your own broker.

 

[thecoder]

And do not dare to give the Kraken website as an example yet again since it not applicable to your situation if you where your own broker.

The Kraken example very well works also for the broker. You just don't grasp it.

 

[DevBru]

The Kraken example very well works also for the broker. You just don't grasp it.

The Kraken example is an example of the broker providing a loan to a client, the exact thing you mentioned isn't what you are talking about ...

 

[DevBru]

Ill make it easy for you:

Lets assume you are your own broker with $100K of you own money deposited to trade.

What do you think your buying power is?

 

[thecoder]

Ill make it easy for you:

Lets assume you are your own broker with $100K of you own money deposited to trade.

What do you think your buying power is?

Here's the formula:

BP = C / (M% / 100)
where
C = your capital
M% = margin requirement in percent

Inserting your example of 100K into the formula and assuming an exchange margin requirement of 20% gives a buying power of:
BP = 100000 / (20 / 100) = 500K

 

[thecoder]

The Kraken example is an example of the broker providing a loan to a client, the exact thing you mentioned isn't what you are talking about ...

In that case the broker passes everything 1:1 to the client, ie. client has the same what the broker has to the exchange.

You have to understand that broker margin requirement not necessarily equals the exchange margin requirement, as usually broker's requirement to his clients can be higher.

Another difference is for example when buying stocks: the broker itself only needs to provide a margin of 50% to the exchange, but if the user wants the same, then he has to pay interest to his broker b/c technically the broker "virtually lends" him the other half, though in reality only 50% of the capital is ever used/needed...

 

[cruisecontrol]

You guys are completely talking past eachother.

Futures and equities are mechanically different. Leverage in futures does not involve loans, it is set by the clearing house margin requirement.

Long-stock is not a leveraged transaction. When you buy a stock, 100% of the money is transferred to the person who sold it. That money has to come from somewhere. It may a loan from the broker, or it may be financed by short sales of stocks or options.