Day trading,credit buying?

FIRE123 · 1 Day trading,credit buying? Wed Mar 02, 2011 10:14 pm

FIRE123

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Can some one advice me on this area please?Many professionals are against buying on credit but there are some who believe that one can make a fortune by buying on credit.specially when some firms offer about 2 weeks to settle the credit.

Gaja · 2 Re: Day trading,credit buying? Wed Mar 02, 2011 11:30 pm

Gaja

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say u have 1 million free cash with you and you buy X no of Y shares, and if the price is gone up by 50 % then you well get the .5 million profit, and if the price comes down by 100% ( maximum loss that u going to incur ), then you will lose ur 1 million.

Now say u don't have any cash and somebody allow to buy you on credit ( generally b brokers will allow a certain % of the holding as credit ) then if the price gone up you will get the profit and if the price came down after the credit period the broker will sell your other shares as well.

Hope u got what i tried to say

So think carefully and make the decision.

YOUR MONEY, YOUR DECISION, YOUR PROFIT/LOSS

ss7097 · 3 Re: Day trading,credit buying? Wed Mar 02, 2011 11:51 pm

ss7097

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Gaja wrote:say u have 1 million free cash with you and you buy X no of Y shares, and if the price is gone up by 50 % then you well get the .5 million profit, and if the price comes down by 100% ( maximum loss that u going to incur ), then you will lose ur 1 million.

Now say u don't have any cash and somebody allow to buy you on credit ( generally b brokers will allow a certain % of the holding as credit ) then if the price gone up you will get the profit and if the price came down after the credit period the broker will sell your other shares as well.

Hope u got what i tried to say

So think carefully and make the decision.

YOUR MONEY, YOUR DECISION, YOUR PROFIT/LOSS

Hey Gaja,

I'm having Credit around 40% of my portfolio and my broker gave it under 15% interest and they won't ask me to sell my shares and settle it. These I've taken before 1.01.2011 and still having same Credit with me. Do you mean anytime they will ask me or sell my share to cover up the money? Then I'm in trouble according to today's market. Is this is same with Margin trading with banks too??

Guys who are having well experience on this margin trading, please give your thoughts on this....... Mad

aga.sanjeewa · 4 Re: Day trading,credit buying? Thu Mar 03, 2011 1:31 am

aga.sanjeewa

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according to my experience, brokers will allow to buy on credit. but when the price come down brokers also don't have any option. they will advice you to sell your shares. brokers also depend on their company policy. that is the point we must understand.
if someone like to keep any share on credit, try to keep your credit amount below 25% on your cash investment. I think that will help for all of us.
becouse when the market shows a red light panic sale also start.

pls make your comment