The Price of Plutocracy
" wrote:
On Thu, 03 Nov 2011 12:22:16 -0500, Douglas Johnson
wrote:
"Robert Green" wrote:
The bank, if it were prudent, might lend you 20% of the value of your stock.
Nonsense. Any broker (investment bank) will lend you 50% of the value in a
heartbeat. Yes, they will hold the stock as collateral, but the interest rates
are really good. --Doug
...as long as you can keep the 50% margin.
The initial margin limit is 50%. The maintenance margin is 25% per the Fed's
Regulation T. If the value of the stock falls below 25% of the account value. it
will trigger a margin call where you need to put up more money or the brokerage
will kindly sell enough of your stock to get back to 25%.
Many (most?) brokers will have higher limits like 30% to 40%.
-- Doug
|