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Non-Tech : MB TRADING -- Ignore unavailable to you. Want to Upgrade?

To: Colin Cody who wrote (2037)	11/19/1998 11:04:00 PM
From: wily	Respond to of 7382

When you open your account, your excess equity is $63,000. Your daytrading buying power is twice your excess equity, or $126,000. You buy 2000 Dell @ $62.75 (against my advice). Let's say Dell closes at $65. Next morning you have overnight position with market value of $130,000. You gained $4,000 (on paper), so your account value is $67,000. Maintenance requirement is 25%. 25% of %130,000 is $32,500. This (maintenance requirement) is how much must be subtracted from the value of your account to get today's excess equity. $67,000-$32,500=$44,500. Daytrading buying power is twice your excess equity. 2X$44,500=$89,000 Overnight buying power equals twice your account value or $134,000. If you sell your 2,000 DELL today you can daytrade DELL up to $89,000 and carry overnight DELL up to $134,000. So, lets say you sell the 2000 DELL you carried overnight at $68. Now the price drops to $63. You can buy $134,000 worth of DELL. Of that you can sell and buy as many times as you like (daytrade) up to $89,000 worth. The remaining $45,000 worth you MUST hold. If you sell it you've generated a FED call. I don't trade at MB, so the rules may be a little different. JMO wily

To: Colin Cody who wrote (2037)	11/20/1998 12:27:00 AM
From: max	Read Replies (1) \| Respond to of 7382

Colin <<This is how a local firm here in Conn. (All-Tech Trading) computes intraday margin.>> Not sure where you're getting your information about Alltech and margin, but it is at least partially incorrect. In your example, your 63K account would give you 126K intraday buying power. As their system doesn't monitor intraday margin requirements during the trading session, it would allow you to take the 3rd 63K lot as you describe, and then present you with a 31.5K margin call the following morning. FWIW, MB's system does not allow you to execute a trade which exceeds your intraday buying power, saving you from what I saw often enough during my 6 months in one of Alltech's trading rooms: -Trader with 50K cash takes a 1000 share long position in a $100 stock -Same trader accidently buys another 1000 shares when he meant to sell -Trader recognizes mistake, and immediately closes 2nd position, but had momentarily exceeded his buying power by 100K -Trader wakes up the next morning to a 50K margin call This example only applies to intraday. As I'm always flat at the end of the day, I can't speak for margin requirements with overnight positions. Max