NanoViricides Inc. (NNVC)

[ZincFinger]

I meant the "infamous" to apply because of their automatic real time sales to maintain margin requirements not because of their change in maintenance requirements. I didn't make that clear.

I've seen stocks get 20% even 50% SP plunges and bounce right back to normal within minutes. If you were carrying on margin at IB you;d have a major loss locked in. With other brokers noting would happen. TDA, for example gives a warning of a possible maintenance call and calculates it at the end of the day.

PS you do not carry specific stocks on margin: the margin is carried on the entire account. If you are carrying margin and own NNVC at IB, then you your level of margin maintenance is affected no matter which stock you paid for with margin money.

The risk of margin is dependent on two things: the various risks of your individual stocks and on the percentage of margin maintenance you are using. The risk goes up exponentially with the percentage.

It's also affected by the availability of other funds if needed.

Margin forces you to at least the extent of the margin you are carrying to be a trader rather than a long term holder: Unless you sell defensively it can act as a downward ratchet on profits (and if you don;t sell appropriately that is also a downward ratchet. Margin is like a chainsaw: it can be useful but it is an inherently very dangerous tool and should not be used if you don't understand or can't manage it well. IMHO it should be used rarely and as an exception. The more often you use it the more dangerous it is.