After reading recent post here I have two questions.
I understand that the trades with MBT are done in a Margin, Type 2 account. This was mentioned with regards to not allowing an IRA to trade over the internet.
So my QUESTION #1 is what if I wish to purchase a NON-marginable stock. Is this allowed to happen as normally as could be? Or is there a complication or prohibition to purchase non-marginable stocks?
Does MBT automatically put a trade into the type 1 or type 2 account as applicable? Are we notified if a stock is non-marginable so we can manage our daily cash/margin?
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ITEM #2
An Example: I open my account with $63,000 cash.
I purchase 2,000 shares of DELL @ $62.75 on Monday
I sell 2,000 shares of DELL @ 66.oo on Tuesday.
I then purchase 2,000 shares of DELL at $63.00 before the close on Tuesday.
QUESTION #2 Is there a problem with this? It soulds like people are saying I'd either be prohibited from making the $63.00 purchase either in part or in total, and/or I'd need to come up with additional cash in T+3 days? and/or I'd receive a Fed Call or a Liquidation. Please explain the logic and the "rule".
I was under the impression I'd have 2x intra-day margin availability.
i.e. if I deposit $63,000 in cash, I could buy $189,000 worth of DELL and as long as I sold off $63,000 worth by the close I'd be "Okay".
Is this correct? If not why not? This is how a local firm here in Conn. (All-Tech Trading) computes intraday margin.
Colin |
