Portfolio Margin out of the question due to lack of credit history

T

trader5454

Hi,

I am 22 years old. I have been trading for four years and I was interested in signing up for PM at ThinkorSwim. I put $125,000 in my account, submitted the paperwork, and completed the easy 20 question test. Somehow in my research of PM, I did not realize credit score was criteria. Since I have bought my car and the place I am living at outright, I effectively have a credit score of 0.

Is there any option on the retail side of things or will I have to go prop to get portfolio margin? I am mainly interested in PM so I can expand my trading of ratios and straddles.

Thanks for any help you can provide.
 
Quote from trader5454:

Hi,

I am 22 years old. I have been trading for four years and I was interested in signing up for PM at ThinkorSwim. I put $125,000 in my account, submitted the paperwork, and completed the easy 20 question test. Somehow in my research of PM, I did not realize credit score was criteria. Since I have bought my car and the place I am living at outright, I effectively have a credit score of 0.

Is there any option on the retail side of things or will I have to go prop to get portfolio margin? I am mainly interested in PM so I can expand my trading of ratios and straddles.

Thanks for any help you can provide.
More...

The reason why they do a credit check is that they look at PM as a credit business like your borrowing money.

1245
 
Have they turned you down yet?

This is actually a very good position to be in, if you're 22 and have a car, a place to live, a 125k trading account and no debt.

You might want to start building credit, if not for this PM account, then for the lavish signup bonuses for travel related cards. See Flyertalk or FatWallet Finance forum for details.
 
I have already been rejected. I was told they want to know your credit history incase you blow up.

I want PM because I believe it will allow me to be a "safer" trader throughout my life. I mainly sell ratios, strangles etc on one product that I know very while, and it is difficult to do these types of trades with size under reg-t. I have paper traded with a PM account and the possibilities it opens up for me trading wise are great.
 
125K is a little on the low side for PM. I would just open up a regular margin account.

Also remember Goal #1 should be return of capital.

Too many people margin up the ass on speculative positions only to blow out.

Better to win small and consistent with lower risk than trying to hit a home run at every bat. In 10-15 years you will see.
 
Regular margin accounts get killed on the trades I try to make. Just to enter a trade, the margin requirement is about 10X my max profit, if the trade moves against me it can go up to 15X. If I had a PM account it would be about 2-4X - I would definately not use all of this margin, but it would just be much easier to enter and adjust my trades then it is with margin.
 
Quote from trader5454:

Regular margin accounts get killed on the trades I try to make. Just to enter a trade, the margin requirement is about 10X my max profit, if the trade moves against me it can go up to 15X. If I had a PM account it would be about 2-4X - I would definately not use all of this margin, but it would just be much easier to enter and adjust my trades then it is with margin.
More...

PM is much better. You don't have to use the leverage but it is nice to have.

1245
 
Try Interactive Brokers.

They only require a bit above $100,000 for PM and I have not heard them turn down accounts for lack of credit history - I do not believe that will be an obstacle at IB.
 
Thanks comintel,

Just to help anyone else out there...so far I have contacted ToS and ETRADE.

ETRADE:
Wants $500,000 in net worth
Income of over $100,000 a year
10 years stock experience, 5 years options
Does not check credit history
$100,000 in account

ToS:
Pass a twenty question test
Credit history check
$125,000 in account to begin with, must stay above $100,000
 
I just checked with interactive brokers - they said that there is no credit history and no net worth check. Income needs to be above $40,000. So basically if you meet the Reg-T requirements you meet the IB requirement. Just need to have $110,000 for account.

This is a bit off-topic for the thread - but is there anyway to make IB's interface more like ToS. I demoed IB a couple years ago and just hated the interface.
 
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