How does margin work with equities?

G

GratefulBear

I started off with a small account in stocks but then went to forex then futures before I found my success. My strategies are working well on futures and I'm interested in running backtests on stocks. However, I'm concerned about how margin works with stocks.

Let's say I have 30K in my account and an additional 30K in margin. If I make one round trip trade for about 60K worth of stock, am I done for the day? Do I have to wait for the trade to settle (T+2) before I can use that 60K again? Thanks
 
I have had margin for years and have never maxed it out. I borrow here and there but never use my max amount. This month my interest will be probably around $15.
 
GratefulBear said:
I started off with a small account in stocks but then went to forex then futures before I found my success. My strategies are working well on futures and I'm interested in running backtests on stocks. However, I'm concerned about how margin works with stocks.

Let's say I have 30K in my account and an additional 30K in margin. If I make one round trip trade for about 60K worth of stock, am I done for the day? Do I have to wait for the trade to settle (T+2) before I can use that 60K again? Thanks
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I suggest you google margin. The answer i just below is wrong. The 2nd answer doesn't answer your question.
 
I believe the only time you have to wait for the trade to settle is when you intend to withdraw the proceeds from
your account. Normally, after the trade has been closed, your buying power is updated to reflect the proceeds from the trade just closed.
 
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The brokers I've dealt with (IB, ToS) allow me to trade with unsettled cash. In general I hold onto positions for more than one day so I'm not sure about multiple large trades in a single day.
 
There are more factors that can contribute to buying power. Is your account marked for pattern day trading? (In that case you may have 4:1 margin or more.) What was the initial margin? maintenance margin? Are there other house requirements? Is your account eligible for "Portfolio Margin" (generally $100K+ required)? For trading stocks, portfolio margin will likely give you the most flexibility without being unnessarily bothered margin calls for high exposure with small drawdowns. As mentioned, there are a lot of factors and your broker will most certainly have the information you need. Robert -
 
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