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gfagerlin
Best brokers for margin with P123 small cap holdings?

I run 4 ports with 5 positions each for a total of 20 stocks priced above $3/share. I rebalance weekly and typically sell and buy 10 stocks on Monday mornings. To do this I need margin to allow the purchase of the buy orders since the sold positions are not “counted” until the next day. I trade at Tradestation and am finding that their “special margin list” requires 100% cash for 40% of my stocks which restricts margin and is close to limiting my ability to make all my buys at the Monday open.

My research so far has found that for my current holdings, including special requirements, is below –

1. Tradestation requires 100% cash for 40% of the stocks and 50% cash for the rest. $1000 of stocks requires $776 equity; leverage 1.29:1.
2. IB requires 100% cash for 90% of the stocks. $1000 of stocks requires $978 equity; leverage 1.02:1.
3. Scottrade requires 50 to 95% cash. $1000 of stocks requires $755 equity; leverage 1.32:1.
4. TD Ameritrade requires 30 to 70% cash. $1000 of stocks requires $380 equity; leverage 2.63:1.

TD Ameritrade seems to have the best margin if the information I received is accurate. Anyone have any actual experience with the above brokers? Any other brokers with better margin availability?

It has been suggested that Portfolio Margin is better for portfolios. “While margin requirements of Regulation T generally limit leverage on equity to 2:1, with portfolio margin, leverage of 6:1 or more is possible.” (https://en.wikipedia.org/wiki/Portfolio_margin).

Has anyone used portfolio margin for P123 small cap stocks? Is it better?

Thanks for any information or insights.

Glenn Fagerlin

Apr 21, 2017 8:29:55 PM       
dmacdonal9
Re: Best brokers for margin with P123 small cap holdings?

I've not really looked beyond IB because I trade midcaps and large caps as well, and those supply more than enough "extra" security to keep my entire account running at about 1.5 leverage. Those ports deliver some diversification as well.

The extremely low margin interest rate at IB is hard to overcome when comparing to other brokerages.

Apr 22, 2017 7:57:21 AM       
J3th
Re: Best brokers for margin with P123 small cap holdings?

Hi Glenn,

at just2trade.com I have about 100% buying power (buy on margin) for marginable stocks (can't see which are marginable) and about 50% b.p. for non-marginable stocks. Portfolio margin is not offered. I had never problems due to lack of cash.

Matthias

Apr 24, 2017 10:50:11 AM       
geov
Re: Best brokers for margin with P123 small cap holdings?

Just checked with just2trade.
Commission is $2.50 per trade irrespective of number of shares traded. iB charges 0.5 cents per share. So if one trades more than 500 shares just2trade is cheaper.

Apr 24, 2017 11:07:25 AM       
U5YJ52993752gH7p5fx8
Re: Best brokers for margin with P123 small cap holdings?

IB standard pricing is 0.5 cents/share with a $1.00 min per trade.
Their "cost plus" pricing is 0.35 cents/share with a $0.35 min per trade.
If your trades supply liquidity to the market they pass some of the discount to you.
This discount reduces my average cost to about 0.30 cents/share.

Bad news is that it can cost more if you take liquidity...

I Started Out with Nuthin. Still Got Most of It Left. - SeaSick Steve

Apr 25, 2017 3:55:47 AM       
strader1
Re: Best brokers for margin with P123 small cap holdings?

All:

You might want to check out MARSCO, $2.50/trade. Also, Robinhood, $0.00/trade, but margin is expensive.

Bill

Apr 27, 2017 5:05:06 AM       
strader1
Re: Best brokers for margin with P123 small cap holdings?

All:

I used to use Just2Trade. They're fine if you're up early. For us West Coaster's getting up at 5:45 just to enter orders is painful.

Bill

Apr 27, 2017 5:09:01 AM