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Thank you Joe and cintrix for the explanations!
It should fill at your price right when the stock hits it. But if it happens that it moves really quickly you could get lucky and it could fill over your price.
Hi Steven: very good questions. I have a margin account for the sole purpose of the 3 day settlement period. Once you sell shares you can then immediately turn around and buy another ticker because of the margin status, it acts as a cash cushion and guarantees the funds for trading. No settlement period wait at all. As far as the Pattern Day Trader Status, it is a totally separate issue. If you make 4 complete turnarounds in a 5 day period you are considered a PDT and your account will be restricted unless you have a minimum balance of 25,000.00. The margin requirements with Scottrade is a 2,000.00 balance, I am fairly sure all the other brokers have the same min requirements to open a margin account. Two totally different requirements for two totally different situations. As far as interest charges, it depends on how aggressive you are at trading and the volume you trade. If your asset value drops below the 2,000.00 level your broker can request additional funds to maintain your margin status.
So do I need a minimum of 25k to not have the 3 day restriction?
No you don't. If you convert your account to a margin account you will no longer have the three day restriction, but you will have the daytrading restriction if you have a balance of under 25k. If your balance is under 25k you have to be careful not to do more than three day trades within a five day period - the fourth roundtrip will trigger a pattern daytrader and you will have a problem. Best scenario is to have a 25k balance in a margin account. If you can't do that be careful how many daytrades you do.
Also if I do purchase with unsettled funds and sell before the settlement date with a margin account am I borrowing money from the broker? So does that mean I would have to pay interest for that loan?
No. Unless you actually go into margin and you see a negative balance - if that is the case then you pay interest. But if you are trading with your own cash - even if it is unsettled - they don't charge you interest. They just use your margin as collateral just in case the trade doesn't clear for some reason.
If I put a sell order at 2.5 and price pops to 3 or 4. Does my sell order process at the 2.5 I requested?
Question regarding margin accounts. So I googled this question and got a few different answers. So currently I have a cash account and it's inconvenient waiting the three days for my funds to settle due to the free ride regulation. I read that by converting the account into a margin account as long as I don't do more than 4 round trips within 5 days I won't get restricted due to day trader status. So do I need a minimum of 25k to not have the 3 day restriction? Also if I do purchase with unsettled funds and sell before the settlement date with a margin account am I borrowing money from the broker? So does that mean I would have to pay interest for that loan? Thanks for answering my questions, I am still learning!
I think that you have to first establish yourself and make that many trades to get it for free. You may be able to pay for it the first quarter. Call them up and ask. I don't know how I could trade without it. So many valuable tools within the platform.
So you have to make that many trades first or can you sign up and get it first and then trade the 30 trades to keep it active?
No it does not require that much money. You just need to do 30 trades per quarter to be eligible.
I have a question about etrade pro. Does it require a 25K balance like scottrade elite? I may switch if it does not require such a large balance. I am not a pro by no means but I like the tools I have seen in videos that have etrade pro. Please advise. Thanks. JC
I don't know if there is a service like that but I would think you are better off looking it up yourself in real time than waiting for them to email you.
If you are making more than 30 trades a quarter you have access to Pro and MT - both of them have top losers and gainers. Along with that Pro has a scanner that you can customize:
The E*TRADE Pro trading platform is available at no additional charge to Pro Elite active trader customers who execute at least 30 stock or options trades during a calendar quarter. To continue receiving access to this platform, you must execute at least 30 stock or options trades by the end of the following calendar quarter.
Thanks Cintrix. I was looking for an email service so I would not have to manually look everyday. However, if looking is the only option right now, I will go with that.
I have an eTrade account so I will check there in addition to the links you provided.
emails them? I don't know of that, but why not just look for yourself?
Any good level II service should provide you with high/lows - I get mine from Etrade Pro and Etrade Market Trader real time - if you don't have access to that try these:
http://www.nasdaq.com/aspx/52-week-high-low.aspx?exchange=NASDAQ&status=LOW#.UV7CATeRc4Q
http://www.barchart.com/stocks/low.php
this one has a filter where you can change the exchange: nasdaq, pink, otc, etc
Does anyone know of a website or service that e-mails you stocks that hit their 52-week lows and / or highs?
When you open a short position you are technically selling so it is at the bid price.
Question. When viewing the trading volume reports on any ticker.. how are short sales listed.. as buys or sells?
Thank you very much. I will check it out.
I am doing my research on trading options too. I have been gathering info for months and I am just about ready to dive in. One of the best persons that I have found to help with understanding how to choose the right stock to play and the best strike price to enter at and the reasons why and when and how to exit with a profit is Cam24Trader. He has a huge selection of videos on YouTube and a huge following. Search YouTube for his name and subscribe, I don't think you will be disappointed. He is a conservative trader and does well. His website is thestockgarage.com he posts a daily watch list that covers penny stocks, big board stocks and options that he trades and that are good setups to trade. Check it out if you want to look at his past watch list and compare them with what actually happened in the market. Also check out
stockhaven.com, they have a live chat room that is free to join where you can get real time trades and setups that are actually being traded at that moment. Good luck with your trading my friend. I am sorry about such a long post but I hope it helps you as much as it did me. Happy trading.
Per the dictionary on Investopedia.com:
http://www.investopedia.com/terms/o/option.asp
Definition of 'Option':
A financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date).
Call options give the option to buy at certain price, so the buyer would want the stock to go up.
Put options give the option to sell at a certain price, so the buyer would want the stock to go down.
Investopedia explains 'Option':
Options are extremely versatile securities that can be used in many different ways. Traders use options to speculate, which is a relatively risky practice, while hedgers use options to reduce the risk of holding an asset.
In terms of speculation, option buyers and writers have conflicting views regarding the outlook on the performance of an underlying security.
For example, because the option writer will need to provide the underlying shares in the event that the stock's market price will exceed the strike, an option writer that sells a call option believes that the underlying stock's price will drop relative to the option's strike price during the life of the option, as that is how he or she will reap maximum profit.
This is exactly the opposite outlook of the option buyer. The buyer believes that the underlying stock will rise, because if this happens, the buyer will be able to acquire the stock for a lower price and then sell itfor a profit.
Does anyone know what options are and how they work?
Just an FYI, claytrader has a dvd and I purchased it and he really breaks it down for us newbies, been learning the hard way for a year with not a lot of good results, check it out it seems pretty straight forward. Good Luck!!
As someone who was burned by pennies pretty bad, I suggest to new investors to read, research and do some paper trading for a while.
Penny stocks on the OTC are generally bad news although you may occasionally luck out. Learn all you can about fundamental and technical analysis. Learn about different trading and investing techniques. A good learning series in my opinion is the For Dummies books. I am reading the Technical Analysis for Dummies now.
Very very true Cintrix. Good sound advice. I am toying around with futures with the paper trad system. There is no way to duplicate the points that you bring out using paper. The normal tendency is to be aggressive since you have no real skin in the game. It is a good time to practice self discipline and creating a trading plan.
I'm the one who generally gets up from the poker table, after winning a couple of hands, rather than give it all back to the house!
Then you are already ahead of the game because you are disciplined.
You have answered a huge question for me! I wasn't sure if one of the keys to penny stocks was diversification. I only have the one, and if fortunate with any one, wouldn't dump it all back into others. I'm the one who generally gets up from the poker table, after winning a couple of hands, rather than give it all back to the house!
Thank you both! It's great to have found a source for honest and knowledgeable advice!
Joe C offers good advice. The only thing I would like to comment on what he said is the paper trading advice. That is a good way to get started, but don't ever think that because you are doing really well paper trading that it will carry over into the real world of trading. There are two reasons for this. One is the psychological aspect. When you are trading with fake money you will trade differently no matter what you think. You may put more into a trade than if you were actually trading - you may stay a little longer in a trade because it isn't really your money - you may be more likely to buy something that you might be scared to buy with your own money. The other point is that when you paper trade you are assuming that you are getting your buys and sells where YOU pick them. That doesn't always work that way. Sometimes you know where you want to exit but when you put your order in it doesn't fill and immediately downticks. Same with a buy. You may see something that you go to buy and there are other buyers in front of you and you don't always get your fill where you want it. When you paper trade that doesn't happen. Getting your fill at your price points is another obstacle. Just keep that in mind.
Thank you Joe for your reply. I opened an account about a year ago, and started paper trading, then life kinda took over and I got away from it for a while. I picked it back up recently and started trading with a couple hundred bucks..woohoo! I'm amazed at how little education and sound information is out there. Rather, one is more likely steered towards these promos pumping their latest stock picks! I was looking to make this venture kind of a hobby, and if I make a few bucks..then great! Even trading with the "big dogs" on the NYSE, I would definitely be a very passive trader, so for me..knowledge is key! Any you would like to impart is most appreciated.
The penny stocks seem to offer some sense of comfort in that it allows an investor an opportunity to dabble with little capital
This is true. You could buy up so many more shares with little cash in something than in a big board company, but that is what makes them so dangerous. They attract those who don't have a lot of money in the first place. I suggest you try it out, one stock at a time. Don't over trade (like if you make money, don't immediately - throw it at another penny stock)- take your time.
Lol..thank you. I guess my question did fall under the "duh" section. Being new to this, I want to make sure I'm as educated as possible. The penny stocks seem to offer some sense of comfort in that it allows an investor an opportunity to dabble with little capital, and yet done wisely, one could see some return. I'm probably the smallest micro organism in this ocean right now..lol..and would probably not ever make enough money to become overly confident. Thanks for all your sound advice!
Also I suggest you follow the newbies board, there are a lot of newbies there as well as some very good traders, you can always find great answers there.
Good morning Mel. Be careful of those that are very excited about a certain stock and those that try to sway you to not buy a stock, it is a jungle out there for sure and there will be many that want to take your money and be happy about it. My best advice to you is to be careful in the advice that you decide to take. I would try trading on paper first and not risk your money until you have a feel for how it all works. Watch the highly publicized stocks, they are called pump and dumps for a reason. There is a rule that many use it is called a three bar rule. Usually a stock will breakout above the trend it is in and continue to move up for three days including the breakout day. The key is to take profits at the end of the third day or early the next morning. This is not fool proof but does cut some losses and preserves your capital. That is the key, take profit when it is there because it can disappear really quick. Do not get greedy and stay in a trade longer than you should, take your profits and remember you can always re-enter a trade if it continues upward but with more money in your account. There is much to learn and I wish you good luck, it is very exciting to pick a winner. One more thing, always do your own due diligence, trust only your own research. Others may have a different agenda than what is best for you. Plan your trade and trade your plan. Know where you will exit the trade before you enter it. Have a great day and happy trading.
I think in an ideal world we all would like to know where we could put little capital with moderate returns. I would suggest that if you decide to get into the penny stock market you don't trade with any money you can't afford to lose. If you make a few good trades at first, don't get cocky and think it is easy money. It's a jungle out there in the penny world and if you don't understand dilution and how promos work I would be careful. That is my advice to you. The majority of penny stocks that move bigly end up dropping back down again. There are some exceptions but most of them behave that way. Most of them are trading under a buck for a reason.
Thank you for your help. Can you offer any guidance for investors with little capital, who seek moderate returns?
go here and plug in a ticker:
http://www.otcmarkets.com/home
example: redg
http://www.otcmarkets.com/stock/redg/quote
you will see quote - look to the left and choose company info first
under the co description you should see the most current share structure (always check the latest filing to make sure that is updated) - under Security Notes you can find if there were any splits (forward or reverse) - there is other info on that page - sometimes you can find the transfer agent listed there, company website, officers etc.
Back to the left of screen - Filings and Disclosure - if they are a reporting company you will find the latest filings there where you can read all of them. The News at the left of the screen will bring you to any recent news releases.
That site will get you any listed info you need. As far as trying to find out if there was a promo on a stock you can try here:
http://www.pumpsanddumps.com/p/directory-of-touts.html
http://stockpromoters.com/Stock-Promotion-History.aspx
Beware of most penny stocks and I would suggest that you don't invest in them. Trade them very short term. Very few penny stocks are worth a long time investment. They can have a cure for cancer and if they aren't managed right it means nothing. Most of them have little cash and raise money at the expense of shareholders by diluting and reverse splitting. Be careful. And don't listen and believe the pumpers.
I am new to penny stock investing and looking for resources to educate myself. A "Penny Stocks for Dummies" so to speak, and wonder if anyone can point me in the right direction? I made my very first purchase REDG about a week ago, but I would like to know how best to research these companies.
Benny and cintrix.. thanks for your input.. I appreciate it!
Thanks for your input.. yes..since 2007 and I use Scottrade regularly but didn't really for penny stocks. I used Zecco for those trades in the past and just wanted to know what was a good, inexpensive, broker that users recommended. This is investor help, right? B11
Thanks for your help! GLTY
They also lower the commission to 7.99 if you make over 150 trades per quarter.
I use Scottrade...You've been here at ihub since 2007, and you're worried about 1/2 of 1 percent on a $7. trade...Try Bingo.
Not sure if it's the best, but I use E-Trade. It's a flat rate of ~$10 ($9.95 I think) per trade. Doesn't matter how many or what their price is. So, as long as you buy in decent quantity it seems OK.
Guys..what's a good broker for penny stocks now a days? I used to use Zecco and since they merged they charge .01 per share on stocks under $2.. also, my Scottrade works but they have that 1/2% on top of normal fee structure for stocks under $1... Saw Sogo but never heard of them as well as Just2trade and a few others.. Any suggestions or help would be appreciated and if you could also tell me why you recommend that broker if you respond I would be thankful..
Thanks!
Ahhhh ok so after I set up that account I'm good to go
First off, do you have a brokerage account that is funded? Once you do that you have to place your orders through them.
I'm looking into buying some stocks how exactly can I do that after I figure out which ones i want to
I know absolutely nothing about bitcoins. Anyone else who has any experience with this can chime in.
Hey guys need some help.
Where can I buy bit coins.
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