You can still have a margin account, it's just at 2:1 and limited daytrades.
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Im new and have a question
- Thread starter takeover1
- Start date
Quote from takeover1:
sorry for all the questions, but what do you mean by cash basis? so if i were to wire money to etrade for example via bank account or check or what not would that be alright?
Yes you would be fine. You can trade with the amount of money that you wire to your brokerage.
Trading on a cash basis means if you wire $5000 to your account, you can buy $5000 worth of stock. Trading on margin means that if you wire $5000 to your account, you can buy $10,000 worth of stock. This is 2:1 leverage. For daytraders, they trade with 4:1 leverage.
It's good that you're educating yourself before opening an account. You sound pretty green so keep asking questions until you feel comfortable before jumping into daytrading. On a side note, only 10% of daytraders consistently make money. If you decide to try out daytrading, realize you're jumping into the deep end and swimming with the sharks. You're competing against people who have 10+ years of experience and your goal is to outsmart them. Whatever your financial situation is, make sure you can afford to lose whatever you put into a day trading account whether it be $5000 or $25,000. I totally encourage you to give it a try when you're ready. <read my tagline> cuz you never know until you try.
DNAJ65000
Quote from dnaj65000:
Yes you would be fine. You can trade with the amount of money that you wire to your brokerage.
Trading on a cash basis means if you wire $5000 to your account, you can buy $5000 worth of stock. Trading on margin means that if you wire $5000 to your account, you can buy $10,000 worth of stock. This is 2:1 leverage. For daytraders, they trade with 4:1 leverage.
It's good that you're educating yourself before opening an account. You sound pretty green so keep asking questions until you feel comfortable before jumping into daytrading. On a side note, only 10% of daytraders consistently make money. If you decide to try out daytrading, realize you're jumping into the deep end and swimming with the sharks. You're competing against people who have 10+ years of experience and your goal is to outsmart them. Whatever your financial situation is, make sure you can afford to lose whatever you put into a day trading account whether it be $5000 or $25,000. I totally encourage you to give it a try when you're ready. <read my tagline> cuz you never know until you try.
DNAJ65000
thanks for clearing that up , i really appreciate it.