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What is a Margin Call? (Day Trading for Beginners)
Рет қаралды 55,911
Күн бұрынThe stock market is an awesome place where you can "work" from wherever you want and make money online; however, it is also a place where you need to learn how to trade wisely. Part of being wise as a day trader is understanding the mechanics of how online stock brokers and platforms operate in regards to the trades you are making. If you are a new trader and looking to learn how to trade, the term "margin call" is something you may have heard or seen, but perhaps still are not quite sure what it is and how it works. Let me explain.
What is a Margin Account? Watch THIS (claytrader.com...)
What is "Shorting"? Watch THIS (claytrader.com...)
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@icezebra77 4 жыл бұрын
Thanks for the great explanation! First time I heard of a margin call was toward the end of "Trading Places" when the Dukes lost everything. That whole sequence of events makes even more sense now!
@claytrader 4 жыл бұрын
Glad it was helpful!
@evoldica4893 2 жыл бұрын
“…you can't sell our seats! A Duke has been sitting on this Exchange since it was founded! We founded this Exchange! It's OURS! It belongs to US!”
@antboogie6645 2 жыл бұрын
@@evoldica4893 *Randolph catching a heart attack* "Mortimer your brother is not well, we better call an ambulance" Mortimer: "Fuck Him!" 😄
@JeffLuntGames Жыл бұрын
Hey man, been watching your stuff off and on for a long time along with other trading education channels. Really glad to see you're continuing with your channel, and I wish you success!
@claytrader Жыл бұрын
I appreciate that!
@wisemanofsorts6068 Жыл бұрын
Here because of Tesla Dec 2022, lol.
@claytrader Жыл бұрын
Yikes!
@wisemanofsorts6068 Жыл бұрын
@claytrader lol, don't worry. I don't really have any skin in the game. I just wanted to know why everyone was tweeting about their margins getting called today.
@claytrader Жыл бұрын
ah, glad to hear!
@Foods_592 Жыл бұрын
2023 still here this night 🤧😂❤
@wisemanofsorts6068 Жыл бұрын
@@Foods_592 Lol, I get it. I now have an average cost base of $139 for Tesla. Put a lot in at $108.
@bookbearerplus 4 жыл бұрын
This happened twice on demo. Thank you!
@claytrader 4 жыл бұрын
Ouch
@edselgreaves6503 Жыл бұрын
Using a demo account, I had my first ever margin call yesterday and it wasn't so bad. What they did was shave off some losses off each of my bad trades. I had 10 bad trades, they took 5 and shaved off about 30% from each of the 5 and that was enough to increase my equity and debt ratio. Luckily I busted my ass all month to get about $900 profit this month, so when they shaved off some losses, it was okay enough to counterbalance. I went from +900 to -450 for this month, which is bearable. Hey at least I didn't lose everything. A margin call saved my ass.
@claytrader Жыл бұрын
It saved the broker's ass lol
@Jennifer-pb7zq 3 жыл бұрын
Appreciate your content. Learning a lot.
@claytrader 3 жыл бұрын
I appreciate that!
@perryadler8074 2 ай бұрын
Especially relevant again. Thanks for the great vid!
@claytrader 2 ай бұрын
Glad you enjoyed it!
@natethetoe386 7 ай бұрын
so a margin call is when you get on the wrong side of a short, and your broker pull you out and forces you to take your losses?
@claytrader 7 ай бұрын
Pretty much.
@Moneyisboss Жыл бұрын
Thank you for clearly explaining this ❤
@claytrader Жыл бұрын
Glad it was helpful!
@geovanniromanos5342 4 жыл бұрын
Dude.. you're amazing.
@claytrader 4 жыл бұрын
Thanks for watching.
@HMJ2001 9 ай бұрын
Thank you sir, the video helps a lot ! 👍🏻
@claytrader 9 ай бұрын
Glad it helped
@Joeystoofast 4 жыл бұрын
Absolutely 10/10 video, thank you for this
@claytrader 4 жыл бұрын
Thanks Joey.
@janoxley 3 жыл бұрын
i thought at a margin call you were asked to deposit money to maintain the maintenance margin. Not that the broker closed your position immediately?
@claytrader 3 жыл бұрын
depends on the situation.
@vugar892 3 жыл бұрын
I came here after almost receiving margin call. Lost 2k which earned all year....
@claytrader 3 жыл бұрын
Sorry to hear that.
@DevendraPatel-pt5cm 3 жыл бұрын
So if we hold and no one sell GameStop stocks, then it means short sellers will have to cover their position even if price is 10000$?
@claytrader 3 жыл бұрын
in theory
@althom9928 3 жыл бұрын
Thanks for the video
@claytrader 3 жыл бұрын
You bet
@user-mx8xg5ex6f 4 ай бұрын
hello sir please tell me the expiry date of margin trading
@claytrader 4 ай бұрын
Watch the entire class.
@panadol34 Жыл бұрын
Thanks for the explanation. I didn't know this was a thing. What I don't understand is, isn't your liquidation price on a trade going to prevent the broker from losing money? I thought the liquidation price was the point at which my collateral is lost but the broker's money is returned to them? I'm still a noob with all this
@claytrader Жыл бұрын
In theory, yes... but sometimes things can get crazy. Like this: claytrader.com/videos/a-true-story-of-stock-traders-going-bankrupt-in-a-single-day/
@Real-up8tr Жыл бұрын
How can I know When/what price exactly they’ll do auto liquidation? I couldn’t find anywhere online. If you have $50,000 cash, how many NQ can you roll the max??
@claytrader Жыл бұрын
You'll want to talk to the individual broker for the details of their policy.
@jannovotny9957 3 жыл бұрын
So I understand, that if you will for example buy 0.5 of a stock and the price will fall for more than its your 0.5stock value, you will get a margin call, because the broker is losing money. But can I eliminate that potencial situation, when i buy like 100% of that stock (like 1 stock, not 0.3/0.5/0.7)? In this situation, I own the whole stock, so theoreticaly, broker didnt lend me any money and I can go theoreticaly on 0. Do I understand it well?
@claytrader 3 жыл бұрын
If you do not use a margin account, and just use your own cash, you'll be fine.
@austinbyrd1703 2 жыл бұрын
The terms of a margin call are entirely arbitrary. A lender could accept collateral of more volatile short-term assets, in the hope it'll appreciate long-term, correct? If you can't pay off the loan then the lender gets a long-term appreciating asset. Win-win for them.
@claytrader 2 жыл бұрын
Right. The best positioned people on the balance sheet are the debt holders.
@diboraashebir7721 23 күн бұрын
If with example more good
@claytrader 22 күн бұрын
Thanks
@Ceberus1x3 2 жыл бұрын
Good explanation but when a broker closes positions to settle call, it DOES protect and IS beneficial for the account holder. Imagine if the stock went to 0 or if they are short it went to a million/share. That person would end up probably more than their entire net worth. It’s NOT just to protect the broker.
@claytrader 2 жыл бұрын
I assure you, if they could somehow profit from it.. they would... so no, it's strictly for their own protection lol
@JuniorMuhubao 2 жыл бұрын
I hate this once I get it resolved I’m switching to cash
@claytrader 2 жыл бұрын
Do what you think is best.
@PaulRizzo504 4 жыл бұрын
Tried margin once. Never understood it was a literal different account so I thought oh I can use margin on this one stock but everytime I hit refresh something else in my account was on margin being used as maintenance. Literally could not tell anymore how much I owned or what was going on. Got that reversed so quick lol
@claytrader 4 жыл бұрын
Understandable!
@abetteryou296 3 жыл бұрын
thnak you clay! So basically let's say for an example you are shorting with $5,000 dollars. Your margin is 50%. The trade goes against you and you are down 50%. Is that when you will get a margin call?. As long as I cut my losses at let's say 2%, I will be fine?
@claytrader 3 жыл бұрын
All brokers have different policies.
@haun6910 4 жыл бұрын
@clay traders good video man, really enjoyed it.just a question do u use a margin or a cash account? (Btw can’t wait for the webinar)
@claytrader 4 жыл бұрын
I use a margin account. See ya tonight!
@quigonjean 2 жыл бұрын
Thank you! 😍🤩
@claytrader 2 жыл бұрын
You’re welcome 😊
@Jawise-vr3fw 4 жыл бұрын
hey been watching the channel for awhile and love your videos. would love to see a video about growing your portfolio through dividend stocks
@claytrader 4 жыл бұрын
My strategy is here courses.moneywithclay.com/p/grow-rich
@xrem6057 3 жыл бұрын
You said game over
@claytrader 3 жыл бұрын
lol...
@certifiedtechleadhater233 4 жыл бұрын
Correct me if I’m wrong, but I thought a broker would contact you to request you top up your margin before execute a margin call?
@claytrader 4 жыл бұрын
Depends on how bad it gets.
@mr_phamtastic 3 жыл бұрын
Good information!
@claytrader 3 жыл бұрын
Glad it was helpful!
@johnwillis5279 2 жыл бұрын
Can you explain day trading margin? What happens if your account is 20k, you use day trading margin and you hold over night?
@claytrader 2 жыл бұрын
You are charged interest.
@memphismadetez 3 жыл бұрын
So JP Morgan’s Intraday margin call will most likely strip the hedges leaving us owning even more of the float at a better price lol ... #AMC
@claytrader 3 жыл бұрын
These tinfoil hat theories are getting very old...
@jacobl7451 2 жыл бұрын
Good movie as well btw
@claytrader 2 жыл бұрын
Cheers
@BroseidonShorts 3 жыл бұрын
When i trade with leverage but use a stop loss which is not very high risk, i wouldnt need to pay 10000 of dollars or? I dont get it
@claytrader 3 жыл бұрын
No, you're fine if you're controlling risk.
@astroglidr 3 жыл бұрын
I've been in the red for months and just turned green within the last couple of weeks, why am I just now getting a call?
@astroglidr 3 жыл бұрын
BTW I'm just trading shares, not shorting
@claytrader 3 жыл бұрын
Ask your broker. They'd know the situation better than I do.
@albertomontero9809 4 жыл бұрын
Hello Claytrader, one quick question: can yo go short with having a cash account? since it's a cash account: who's gonna lend you money for going short? Will a broker do it?
@claytrader 4 жыл бұрын
You must have a margin account to short.
@anthonycalovic4654 2 жыл бұрын
I saw you used 10 calls for Tesla today and made 525 from that. I'm wondering why you used a call for that? Was that use of a margin call or was that something else?
@claytrader 2 жыл бұрын
These are the types of things I talk about with premium members, and if you're interested in "talking stocks/trading in general", you are more than welcomed to join my private community - claytrader.com/team/
@Xjolt1 3 жыл бұрын
So you cant even be margin called unless you trade shorts?
@claytrader 3 жыл бұрын
You can use margin on long sided trades.
@kusheen... 4 жыл бұрын
So in short a margin call is a stop loss determined by a broker instead of you.
@claytrader 4 жыл бұрын
yup
@jacobvillanueva38 3 жыл бұрын
I have an account on cashapp. I’m still confused if I have a margin account or cash account I used my own money to invest would I be margin called?
@claytrader 3 жыл бұрын
Only if you use borrowed money.
@jimjam2140 3 жыл бұрын
At time stamp 3:00.... How we are going to get profit .when the chart goes down .i didn't understand that .can anyone explain .or any link of youtube.
@claytrader 3 жыл бұрын
You lose money if prices go down...
@Stretch405 Жыл бұрын
When shorting you can make money as the price goes down. You’re borrowing shares betting that the price goes down so you can buy them back at a cheaper price and keep the difference
@alexhodl1018 2 жыл бұрын
can you short with a cash account?
@claytrader 2 жыл бұрын
No
@domiflichi 4 жыл бұрын
Didn't the phrase 'margin call' start because back then your broker would actually give you a good ol' fashioned telephone call?
@claytrader 4 жыл бұрын
Back in the day, I'm sure that's how it was.
@iliketoshoot848 4 жыл бұрын
I use webull, and I got a margin call. But i have a cash account. What is really going on.
@claytrader 4 жыл бұрын
are you sure it's a cash account?
@iliketoshoot848 4 жыл бұрын
@@claytrader 100% I would never risk whats not mine. You ever heard of this?
@claytrader 4 жыл бұрын
@@iliketoshoot848 i have not, not with a cash account
@iliketoshoot848 4 жыл бұрын
@@claytrader I guess on the bright side it's only -$4.73. Maybe it'll work it self out.
@claytrader 4 жыл бұрын
@@iliketoshoot848 hope so!
@catfishlol1498 3 жыл бұрын
Amc and gamestop
@claytrader 3 жыл бұрын
Indeed
@Gino12164 3 жыл бұрын
Question does it also count for the other side? so not for shorters?
@claytrader 3 жыл бұрын
Yup!
@Gino12164 3 жыл бұрын
@@claytrader how dies that work. Becuase if you place like 50 dollar you lose 50 dolar or are there other ways that can happen?
@claytrader 3 жыл бұрын
if the $50 is borrowed money (on a margin account), you still owe it
@eugene9353 3 жыл бұрын
But if i use margin money to buy a stock for a long term ?
@claytrader 3 жыл бұрын
Then you could be in lots of pain if it does not go up.
@eugene9353 3 жыл бұрын
@@claytrader but if I have 2000 in stocks, I take 1000 margin, which means 3000 is my portfolio and -1000 on the account. all portfolio should drop to 1000, to get me into trouble right_?
@claytrader 3 жыл бұрын
I think, but you are confusing me now.
@eugene9353 3 жыл бұрын
@@claytrader why 😀 ?
@claytrader 3 жыл бұрын
@@eugene9353 you tell me
@clsybtrfly 3 жыл бұрын
I’ve never had a margin call even tho my account says it’s a margin account. My broker will front me the money to purchase stock until my transfer clears but I purchase stock not calls. My nephew just started trading about 2 months ago and only purchases stocks not options but he got a margin call and they ask he deposit another $36, I’m not understanding why he would of gotten a margin call.
@claytrader 3 жыл бұрын
Hmmm... that's interesting.
@shcottypimpin4498 4 жыл бұрын
I just got hit with one today, I believe... Day equity call. STD (TD) lol. PDT stuff tho. Too many round trips in 5 days.
@shcottypimpin4498 4 жыл бұрын
My situation was not the same. My fault. Still learning lol
@claytrader 4 жыл бұрын
You're not the first to have to deal with the stupid PDT... might want to consider this claytrader.com/videos/how-to-get-started-day-trading-with-only-100-and-zero-pdt-rule/
@MrCbell57 4 жыл бұрын
Is any of this stuff in your course?
@claytrader 4 жыл бұрын
RIck... I've been replying to your emails, are you getting them?
@jasonmolihan61 3 жыл бұрын
Is there a set time your broker will give you to put more cash in your account, or is that expected immediately?
@claytrader 3 жыл бұрын
No set time.
@trevbeats77 4 жыл бұрын
Great video buddy. What is the normal percentage on a margin call and is it based on the capital of the account? I am with IG. Thanks again for goos info.
@claytrader 4 жыл бұрын
It depends on the broker. It can vary quite a bit.
@trevbeats77 4 жыл бұрын
@@claytrader Hi Buddy, Yep Good news: 50% then and 2nd call on 75%. However, I only trade max 10 % of the cap, if scalping may hit 25% but in and out quick trades. What platform do you use Clay? I hear the states are quite restricted on spread betting?
@claytrader 4 жыл бұрын
@@trevbeats77 here ya go claytrader.com/resources/
@xrem6057 3 жыл бұрын
What saygamestop
@claytrader 3 жыл бұрын
Ouch
@swaggiodimaggio4536 4 жыл бұрын
I saw a clip from a Margin Call movie right before this was uploaded
@claytrader 4 жыл бұрын
Perfect timing!
@zeea320 3 жыл бұрын
It’s a limit by your broker, that a Risk limit has been exceeded for his comfort, beyond this he thinks your losses will be too much, so he is closing the account, something has gone wrong and he is doing you a favour and shutting the account down, as he feels your risk is too much.
@claytrader 3 жыл бұрын
Right. It's how the broker protect themselves.
@zeea320 3 жыл бұрын
@@claytrader Brilliant videos, may thanks, im actually an airline pilot, just researching this subject, somewhat intrigued... shall watch all your videos.. just purchased a book on Day Trading.. I have time ... not sure wherevthis will go.. but for now researching ..
@claytrader 3 жыл бұрын
@@zeea320 I'd encourage you to sign up for my (free) class I offer here claytrader.com/1-hour-trader-transformation/
@FluffyLuck 4 жыл бұрын
Second:)
@claytrader 4 жыл бұрын
Congrats
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