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 –
- 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.
- IB requires 100% cash for 90% of the stocks. $1000 of stocks requires $978 equity; leverage 1.02:1.
- Scottrade requires 50 to 95% cash. $1000 of stocks requires $755 equity; leverage 1.32:1.
- 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