Have buy power, but can't buy a marginable stock?

C2
1

It says I have $ 4,000 buy power, but will not let me buy a $ 10/sh stock on margin?

2

Please let me know the specifics: Which of your several systems are you talking about? What quantity did you try to buy? What symbol? When?

3

I am talking about Premium Seller Ver 2. I am talking about today. I wanted to buy 100 shares of SYNM. Also, this currently the only system that I did pay Collective 2 to be able to trade.

4

Sorry, I meant SVNT

5

"Invalid Order

Problem with signal

Unable to BTO 100 SVNT - Current account cash is ($5,628.50); proposed trade requires cash of $487.50(code=pre)"



I know my cash account is negative, but it says I have buy power, and from my understanding this is a margin stock. I want to be able to buy stocks on margin. My account value is higher than my negative cash balance.

6

It says my buy power is Buy Power $7,371. I tried to place the order again, same error message. Please help and/or advise?

7

C2’s stock margining system works like this:



You are allowed to “borrow” 50% of a stock purchase, but you must put up 50% cash to do so. (Of course I’m talking about virtual cash in your C2 Model Account; I am not suggesting that you write a check to C2!)



Matthew

8

Matthew,



In the real world it works like this. Lets assume I have $ 1,000 cash, and I buy a stock that is selling under $ 1,00 and this stock is not marginable since its selling below $ 5/sh. So now I have $ 1,000 of say ABC stock.



Now lets assume I want to buy $ 300 of a stock that is selling around $ 10/sh. I correctly will still have around $ 1,000 buying power since I bought the previous stock in my cash account, and should be able to now buy the stock that is trading around $ 10/sh even though I maxed out my cash account on non marginable stocks previously.



Please feel free to respond, or tell me why I have buying power and did not get a margin call when I had other stock in my account that was selling for $ 47/sh and I just sold 100 shares of that stock, which now shows my buying power has increased, but I am still not able to buy 100 shares of the stock which is selling for $ 10/sh.



Thanks in advance.

9

Started $10,000

Buy Power $7,233

Cash ($5,628)

Equity $12,862

Cumulative $ $6,319

Total System Equity $16,319

Margined $0



Look I have at least 2 stocks in my account that can be margined, but I have $ 0 margined which makes no sense. As the stocks which are not marginable go up in value, that means my buying power should go up which seems to be working. However, something is not set correctly with my system. I can try to sell some stock to get cash value back to above $ 0 if you think this will fix the problem.

10

Because we support multiple instrument classes in one single account, the margin terminology we use is a bit different than what is considered standard. I agree that it can be confusing.



So: On C2, when you buy 10 shares of stock for $20/share, your cash decreases by $100… not $200.This effectively lets you buy stock “on margin.” You only put up 50% cash. (But note that your “margined” bucket does not increase in this case; rather, the amount of cash you use to buy the position is half what you’d expect. The other half is “borrowed.”)



The “margined” bucket you allude to in your previous post is for forex and futures trades. In those cases, when you open a trade, you must put up collateral to hold the position. That’s what we use the “margined” column for.



Matthew

11

I understand what you are saying, but does collective2 let me buy a stock for $ 1/sh on margin? If not, what is the lowest price stock I can buy on margin?



I reserve the right to ask another question once this is clarified.



Thanks Again.

12

$5/ share is the lowest price we allow stocks to be bought on margin