POLL: Do you use margin?

T

trendisyourfriend

Hi all, I've been paper trading stocks for about 1 year now. I'm curious to see what you guys think of using margin.

I trade base breakouts and I use a 7% SL and a 20-25% TP..

What has your experience been trading stocks on margin? Is it too risky to touch?
 
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It depends on what you trade. Using margin on a megacap stock like AMZN that only moves 1% on avg daily makes sense.

Trading margin on any stock that can swing 10%+ more a day would be a stupid idea.
 
Depending on the purpose of use, the margin can be variable-free, hedged, locked. All of these derivatives essentially represent the amount of money. If you answer the question of what margin is in forex in simple words, then the definition is as follows: margin is the difference between the price of opening a deal and the current price. The margin on the exchange is no different from the margin on Forex - exchange instruments rise and fall in price in the same way.
 
You really should have been trading oil futures on margin in 2020...You would have learned a lot.

Mon 20 Apr 2020 14.26 EDT

US oil prices turned negative for the first time on record on Monday after oil producers ran out of space to store the oversupply of crude left by the coronavirus crisis, triggering an historic market collapse which left oil traders reeling.

The price of US crude oil crashed from $18 a barrel to -$38 in a matter of hours, as rising stockpiles of crude threatened to overwhelm storage facilities and forced oil producers to pay buyers to take the barrels they could not store.

The market crash underlined the impact of the coronavirus outbreak on oil demand as the global economy slumps.

On Tuesday prices rebounded above zero, with the US benchmark West Texas Intermediate for May changing hands at $1.10 a barrel after closing at -$37.63 in New York on Monday.
 
GotherL said:
It depends on what you trade. Using margin on a megacap stock like AMZN that only moves 1% on avg daily makes sense.

Trading margin on any stock that can swing 10%+ more a day would be a stupid idea.
More...

Have you ever traded a stock using margin and the price swung 10% against you? if so, did you get a margin call from your broker?
 
No, I just use options for more leverage. Even tiny stocks go up a lot eventually get options writers. I remember when FUBO went public via a SPAC and I bought it around $9, by the time it was in the high $20s there were already option writers and that was only a few weeks later.
 
Trading on margin is a two-edged sword. When it cuts you, it going to be a deep cut.
 
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