Margin qns

[clarodina]

You have 1000 and buy 2000 worth of stock using 50% margin. You dont get margin call with stock price decrease?

 

[wintergasp]

You do if you lose 50% on your stocks.

 

[zdreg]

You do if you lose 50% on your stocks.[/QUOTE

there are maintenance requirements. you will receive a margin call long before it drops 50%.

https://www.sapling.com/6522069/calculate-maintenance-margin

 

[clarodina]

Are there creative ways to avoid the call without sending more capital?

 

[JackRab]

Trade less size....

Or buy some puts at 60 or 70%

 

[clarodina]

How do u hedge the put on market rally?

 

[JackRab]

How do u hedge the put on market rally?

You have the stock don't you? So you use the put as a hedge for the stock... that was your initial question.

If the market rallies you make money on the stock... but lose a bit on the put.

If you want protection you pay for it in insurance... you can't have it both ways.

 

[clarodina]

Itm put has quite big spread dont they?

 

[JackRab]

why trade an ITM put?