How in the world would they even allow a single margin trade anyway? I have accounts with Vanguard and TD Ameritrade and the requirements must be met along with an online application. This sort of activity makes me very suspicious of RH. They have the potential to be totally blindsided by a group of clients on any particular day getting a margin call without the liquidity to back it up as collateral. Trading this way isn't for rookies.
Agree..RH is mickey mouse for sure didnt they have massive outage issues during the high volume peak times? NO WAY would I ever be involved with a firm that I could even remotely have an issue with executing a trade at any and all times.
Quote Originally Posted by gambleholic63:
How in the world would they even allow a single margin trade anyway? I have accounts with Vanguard and TD Ameritrade and the requirements must be met along with an online application. This sort of activity makes me very suspicious of RH. They have the potential to be totally blindsided by a group of clients on any particular day getting a margin call without the liquidity to back it up as collateral. Trading this way isn't for rookies.
Agree..RH is mickey mouse for sure didnt they have massive outage issues during the high volume peak times? NO WAY would I ever be involved with a firm that I could even remotely have an issue with executing a trade at any and all times.
There are a few types of option trading accounts. Usually five. I do not know how Robinhood works. But for the first couple types you do not need a margin account. The rest you will need a margin account. Some places you will have to open a margin account to trade options. But the trade you did is not one requiring margin. Because what you invest is the most you can lose. That was the point in me saying if you want to short a stock it is better to buy puts. If you are do a normal shorting of stock — you will need margin and you could theoretically lose a lot more than you invest. They will not let you even do this unless you are set up and have it funded a certain amount beyond your trade to even start. This is why I never mention it to you. It is foolproof this way.
A pattern trader or day trader classification is determined by how often you buy and sale a stock. If you buy HD today and sell it today — that is a day trade. If you do this 4 out of 5 times in a week you will get classified as a pattern trader and have to fund the account — in your case 25K. I would look at their website and they will give you the rules specific to their site. If not, call them and ask.
If you are daytrading like this you can also get caught up in a ‘wash sale’ if you are not careful. This will disallow you to write off losses on capital gains, etc.
There are a lot of rules. Some are IRS specific and some are platform specific. If you plan to do this type of trading on a regular basis then you need to get familiar with them.
But the way I understood you — you wanted to buy some HD puts and sell them next week. That is not a day trade and would not need margin.
Also, if you are worried about taxes — keep in mind the difference between long term and short term capital gains. Anything less than a year and a day — and anything longer than a year and a day.
A lot to know if you are going to keep trading this way.
There are a few types of option trading accounts. Usually five. I do not know how Robinhood works. But for the first couple types you do not need a margin account. The rest you will need a margin account. Some places you will have to open a margin account to trade options. But the trade you did is not one requiring margin. Because what you invest is the most you can lose. That was the point in me saying if you want to short a stock it is better to buy puts. If you are do a normal shorting of stock — you will need margin and you could theoretically lose a lot more than you invest. They will not let you even do this unless you are set up and have it funded a certain amount beyond your trade to even start. This is why I never mention it to you. It is foolproof this way.
A pattern trader or day trader classification is determined by how often you buy and sale a stock. If you buy HD today and sell it today — that is a day trade. If you do this 4 out of 5 times in a week you will get classified as a pattern trader and have to fund the account — in your case 25K. I would look at their website and they will give you the rules specific to their site. If not, call them and ask.
If you are daytrading like this you can also get caught up in a ‘wash sale’ if you are not careful. This will disallow you to write off losses on capital gains, etc.
There are a lot of rules. Some are IRS specific and some are platform specific. If you plan to do this type of trading on a regular basis then you need to get familiar with them.
But the way I understood you — you wanted to buy some HD puts and sell them next week. That is not a day trade and would not need margin.
Also, if you are worried about taxes — keep in mind the difference between long term and short term capital gains. Anything less than a year and a day — and anything longer than a year and a day.
A lot to know if you are going to keep trading this way.
There are rules. Just ask them what they are. I imagine you can sale this one. That would only be two in two days. Verify the rules.
Finding a buyer. But that is always going to be an additional problem with options. That is why I mentioned how much volume yours had the other day. You usually want to trade high volume options that have a lot of open interest and activity. Etc.
If you really want to sell them you my have to place your sale order at a slightly lower price to attract a buyer. You can go and look at what the market ask is for whatever you have — and for sure you should be able to get that price — if you just want to get out of the trade.
There are rules. Just ask them what they are. I imagine you can sale this one. That would only be two in two days. Verify the rules.
Finding a buyer. But that is always going to be an additional problem with options. That is why I mentioned how much volume yours had the other day. You usually want to trade high volume options that have a lot of open interest and activity. Etc.
If you really want to sell them you my have to place your sale order at a slightly lower price to attract a buyer. You can go and look at what the market ask is for whatever you have — and for sure you should be able to get that price — if you just want to get out of the trade.
Wow. I wrote that in a hurry and didn’t proofread again. Sale and sell are not interchangeable. Autocorrect — I depend on it too much. But you get the points I hope.
Wow. I wrote that in a hurry and didn’t proofread again. Sale and sell are not interchangeable. Autocorrect — I depend on it too much. But you get the points I hope.
You should have seen my taxes last year. I had a good amount in crypto, sold two houses, the houses were rental properties, switched jobs, got a severance, sold stocks and I went to an Asian lady that barely speaks English at Liberty Tax.
She filled out the paperwork for the bitcoin and called it BIG CORN.
You should have seen my taxes last year. I had a good amount in crypto, sold two houses, the houses were rental properties, switched jobs, got a severance, sold stocks and I went to an Asian lady that barely speaks English at Liberty Tax.
She filled out the paperwork for the bitcoin and called it BIG CORN.
You should have seen my taxes last year. I had a good amount in crypto, sold two houses, the houses were rental properties, switched jobs, got a severance, sold stocks and I went to an Asian lady that barely speaks English at Liberty Tax. She filled out the paperwork for the bitcoin and called it BIG CORN.
I know. A lot to keep in mind when tax time comes. Can get tedious in a hurry.
Quote Originally Posted by I_Need_A_Detox:
You should have seen my taxes last year. I had a good amount in crypto, sold two houses, the houses were rental properties, switched jobs, got a severance, sold stocks and I went to an Asian lady that barely speaks English at Liberty Tax. She filled out the paperwork for the bitcoin and called it BIG CORN.
I know. A lot to keep in mind when tax time comes. Can get tedious in a hurry.
Quote Originally Posted by Raiders22: Quote Originally Posted by I_Need_A_Detox: USO $6 call 4/17 18 contracts Avg cost $0.15 Did you place the orders to sell this yet? no I can’t because that warning of being flagged as a day trader came up
Call them. You should be able to do more than one trade before they flag you. Just tell them you didn’t know and want to make sure of the exact rules.
I get real lazy in a bit I will look at their site. I know a few guys that trade there and they are mostly younger guys. I have never known them to have this issue. I have to look at it. I know they are doing some exotic trades. And I imagine they didn’t fund it with 25k. I may be wrong.
Quote Originally Posted by I_Need_A_Detox:
Quote Originally Posted by Raiders22: Quote Originally Posted by I_Need_A_Detox: USO $6 call 4/17 18 contracts Avg cost $0.15 Did you place the orders to sell this yet? no I can’t because that warning of being flagged as a day trader came up
Call them. You should be able to do more than one trade before they flag you. Just tell them you didn’t know and want to make sure of the exact rules.
I get real lazy in a bit I will look at their site. I know a few guys that trade there and they are mostly younger guys. I have never known them to have this issue. I have to look at it. I know they are doing some exotic trades. And I imagine they didn’t fund it with 25k. I may be wrong.
When you buy and then sell the same stockor options contract on the same trading day, you’ve made a day trade.
You’re generally limited to no more than three day trades in a five trading day period, unless you have at least $25,000 of equity in your Instant or Gold account at the end of the previous day. This sounds tricky, but it just means that if you want to day trade today, you had to have an account value of more than $25,000 at the end of yesterday.
I copied his right off of their site:
When you buy and then sell the same stockor options contract on the same trading day, you’ve made a day trade.
You’re generally limited to no more than three day trades in a five trading day period, unless you have at least $25,000 of equity in your Instant or Gold account at the end of the previous day. This sounds tricky, but it just means that if you want to day trade today, you had to have an account value of more than $25,000 at the end of yesterday.
That part is to me is not more than 3 of these trades in a 5 day period. Some places have rules about trading the same stock over and over as well. So ask them if there is anything you need to know about what you plan to do.
But if you have only done the HD trade yesterday — you are fine to do it today, according to the rules they have posted.
That part is to me is not more than 3 of these trades in a 5 day period. Some places have rules about trading the same stock over and over as well. So ask them if there is anything you need to know about what you plan to do.
But if you have only done the HD trade yesterday — you are fine to do it today, according to the rules they have posted.
Yeah they cant stop you from selling a position you have, but they will restrict your account...but if you want to sell it then sell it and then put in the 25k PLUS to get off the restriction list.
Yeah they cant stop you from selling a position you have, but they will restrict your account...but if you want to sell it then sell it and then put in the 25k PLUS to get off the restriction list.
Quote Originally Posted by gambleholic63: How in the world would they even allow a single margin trade anyway? I have accounts with Vanguard and TD Ameritrade and the requirements must be met along with an online application. This sort of activity makes me very suspicious of RH. They have the potential to be totally blindsided by a group of clients on any particular day getting a margin call without the liquidity to back it up as collateral. Trading this way isn't for rookies. Agree..RH is mickey mouse for sure didnt they have massive outage issues during the high volume peak times? NO WAY would I ever be involved with a firm that I could even remotely have an issue with executing a trade at any and all times.
Imagine if a bunch of RH rookies decided to short BA on the day it bottomed only to see it climb to 180 within the next few trading days. With inadequate liquidity, that would be a big mess to sort out.
I own 1% of the price of one BTC on RH and that's all (and of course I don't own the BTC, only the promise from RH that they will pay the spot price when I sell). Hearing this news on how they could potentially get stuck would be concerning to me if I was using them as a primary brokerage. I was actually considering sending them over some funds from my checking account but this news makes it a no go for me.
Gamble for entertainment, invest for wealth!
Quote Originally Posted by wallstreetcappers:
Quote Originally Posted by gambleholic63: How in the world would they even allow a single margin trade anyway? I have accounts with Vanguard and TD Ameritrade and the requirements must be met along with an online application. This sort of activity makes me very suspicious of RH. They have the potential to be totally blindsided by a group of clients on any particular day getting a margin call without the liquidity to back it up as collateral. Trading this way isn't for rookies. Agree..RH is mickey mouse for sure didnt they have massive outage issues during the high volume peak times? NO WAY would I ever be involved with a firm that I could even remotely have an issue with executing a trade at any and all times.
Imagine if a bunch of RH rookies decided to short BA on the day it bottomed only to see it climb to 180 within the next few trading days. With inadequate liquidity, that would be a big mess to sort out.
I own 1% of the price of one BTC on RH and that's all (and of course I don't own the BTC, only the promise from RH that they will pay the spot price when I sell). Hearing this news on how they could potentially get stuck would be concerning to me if I was using them as a primary brokerage. I was actually considering sending them over some funds from my checking account but this news makes it a no go for me.
If they agree to cut production I doubt it will be enough to make a difference. The oversupply right now will not end until global business gets back to normal or at least gets past 1st gear.
Gamble for entertainment, invest for wealth!
If they agree to cut production I doubt it will be enough to make a difference. The oversupply right now will not end until global business gets back to normal or at least gets past 1st gear.
Whether they do it here or next meeting, I could care less.. only a trader would care. The reality is that even these despot regimes must answer to their own people... even though they can afford to play the waiting game much longer than U.S. shale producers.
At the end of the day, they have much more to lose than the shale industry. Their very powerful is at stake.
So, what's the big takeaway from all this ?? Stick w the big u.s. integrated companies that have the wherewithal to survive the big circus sideshow. Have I mentioned already that CVX and XOM are the best positioned ?
Whether they do it here or next meeting, I could care less.. only a trader would care. The reality is that even these despot regimes must answer to their own people... even though they can afford to play the waiting game much longer than U.S. shale producers.
At the end of the day, they have much more to lose than the shale industry. Their very powerful is at stake.
So, what's the big takeaway from all this ?? Stick w the big u.s. integrated companies that have the wherewithal to survive the big circus sideshow. Have I mentioned already that CVX and XOM are the best positioned ?
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