I have always had margin so do not know what is is without but I thought the settled funds issue was one of being a day traders or not. I think the only requirement for that was a minimum $25k in account.
Regardless, you cannot use margin for OTC stocks and of course not pink sheet stocks now would you want to. Some brokers also limit it to stocks over a set amount like $5 and there are some stocks with very high beta that are non marginable and each broker has a list.
Margin doubles your buying power for stocks held overnight and up to 4X for day trades.
It should be used when you have higher risk reward situations.
A recent example is GOOG that had been on fire and then fell and broke its trend line the the 50-day EMA http://tinyurl.com/8xdw6
It then went to the 200-day EMA and second trend line so a very low risk buy as it has much support and if it failed you would get out with small loss.
The target when stocks break a trend line and then reverse back up is the trend line from below and in this case happens also to be the 50-day EMA again so the full move would be $58 or 17% but using margin the gains would be 34%.
Margin is great but you have to use it only in low risk situations.
I use it for day trades almost every day so for break out plays I can use up to 4 times my actual available balance. I use it on high volume breaks outs that have a better chance to succeed. Yesterday were breaks like VION http://tinyurl.com/n9ce6
hey macd with margin once you sell youre able to use the proceeds right away to trade with. I have 1 cash account and 1 margin for daytrading and cash account for long positions
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