Margin Question. How much buying power if holding all SPY in an account?

S

startingout

If I have a daytrading margin account with lets say $50,000.

If I buy the ticker SPY with every cent of the $50,000.

How much daytrading buying power would I have to trade in my account?

Dont they allow you to borrow money from the stuff you own to trade? If so, how much would the daytrading buying power be?
 
Quote from startingout:

If I have a daytrading margin account with lets say $50,000.

If I buy the ticker SPY with every cent of the $50,000.

How much daytrading buying power would I have to trade in my account?

Dont they allow you to borrow money from the stuff you own to trade? If so, how much would the daytrading buying power be?
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It's 50% margin. So you could buy 50k worth of spy and still have 50k left in cash. If you meant that you wanted to leverage the SPY position completely as in buying 100k of SPY, then you have no money left over. Just be aware you are paying interest on that 50k that may not cover any profits from the SPY position over the course of the year.
 
Quote from Maverick74:

It's 50% margin. So you could buy 50k worth of spy and still have 50k left in cash. If you meant that you wanted to leverage the SPY position completely as in buying 100k of SPY, then you have no money left over. Just be aware you are paying interest on that 50k that may not cover any profits from the SPY position over the course of the year.
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Actually I think its 25% maintence margin for broad based indices.

So he could control 200,000 worth of SPY. But he would little cushion before getting margin called on a selloff.
 
Quote from newwurldmn:

Actually I think its 25% maintence margin for broad based indices.

So he could control 200,000 worth of SPY. But he would little cushion before getting margin called on a selloff.
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I think what he meant was, if he held an SPY position long term, can he borrow against the "position" to daytrade. The answer is yes, if he only buys 50k worth of SPY, he can daytrade with half of it. If he meant he wanted to daytrade the SPY and not hold ANYTHING over night, then yes, he can trade 200k worth of SPY. But he seemed to imply that he could put all his money in SPY and then borrow against that to daytrade every day. I think he needs to be more specific with what he is trying to do.
 
Sorry to be unclear...


If I put $50k in a daytrading margin account, and purchased $50k in SPY with it, leaving $0 cash left... and I held the SPY in that account forever with no cash... how much money would a broker allow me to daytrade in that account? and, could anything be held over night?
 
assuming spy is flat he can hold a position of $200,000 intraday of spy every day as a patterned day trader. however, by 4pm his position must be sold down to $100,000 of spy.
 
Let me try to make it clearer.

Say I have $50k cash in a daytrading margin account.

All cash.

Then, I use the entire $50k to buy SPY that I will hold forever.

The next week I still have the SPY in my account. In a daytrading margin account, would my broker allow me any daytrading buying power based on the fact that I have $50k in SPY and $0 in cash in the account? If so, how much daytrading buying power would I have?
 
Quote from tradingjournals:

Do you mean "25K left in cash" instead of "50k left in cash"?
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His question was worded very poorly. I don't know if he was asking if he meant using up all his buying power or using up all his cash. He bailed on the thread so I guess it's a moot point. Makes me wonder why I ever bother responding to newbies on here.

All he needs to know is he cannot hold his cash in SPY and get extra buying power. If he uses up his margin to buy SPY, he does not get to borrow again against it. I'm not a mind reader but I think that is what he was asking.
 
if maintenance requirement is 25% spy can drop 33% before receiving a margin call on an overnite position.
e.g. purchased 100k spy with 50k of your own money.
if spy becomes worth 67k your equity is now 17k (50k- 33k loss) and the stock is worth 67k. 17k/67k = 25% if it moves lower u receive a margin call.
 
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