i have a question. not sure if this is right spot just seen investor help. I have been trading penny's for a year now, have been considering upgrading to a margin account. i know there more risk you could lose more then you deposited. my question is i want to make sure i did my math right on figuring out how the fees and all that stuff works. I'm going to use etrade as an example. I know you have to have a min. of $2,000 for a margin account.
just say utog is trading a .01 i buy in at.01 but i want 20,000 shares. thats $200. i use $100 of my money, and borrow $100. the stock goes up and i sell at .02 for $400.
so i deduct $100 i have to pay back that i borrowed, that brings me down to $300. minus the 8.44% interest rate of 100 i believe is $8.44 interest. plus $10 trade commission fee. i would owe $118.44 with a total profit i walk away with at $281.56 and it only cost me $100 of my own money so I'm up on a decent gain? am i correct?
also to pay off interest and fees do i pay that as soon as i sell the stock? or is it a monthly payment? di i have the option to just pay off my fees and owed money i had to borrow the day i sell?
also with shorting a stock I'm i am correct. is when a stock is on a decrease you sell it short. example if a stock was currently at .04 and dropping i put a short order in for .02 thats a double profit i take? on a paid promo if a stock is done its run at just say .0015 if I'm successful i can short it to .0009 but if it does not go that low i would owe a lot of money? I'm still learning on shorting, and would not jump into it right away until i get more familiar and comfortable with it. or is shorting just a back up plan if u jump in on utog for .01 and declines I'm losing money it goes down to .008 i can short sell it to cover my lose, and instead of losing that .01 i can short it down and i would profit that way? as long as its below my original buy price and giving the fact that its enough to profit after being hit with fees and money owed? i really appreciate the help.
patience, and acceptance is key to making money. greed will take your money, your life, and everything you own.
