I see that C2 have 50% margin requirements, but it doesn’t make a difference between initial margin and variation margin, which is usually only 30% not 50%.
So can someone tell me how C2 calculate margin requirements and available equity?
Thanks.
I have the same question.
By the way, most brokers give 400% daytrading buying power. Will C2 apply this to our system?
Talking about having enough rope to hang ourselves: I think the subscriber can use whatever margin he wants. But overexposure will surely backfire killing quickly your system. A few losses can kill the buying power of a system with small capital.
Many brokers allow 2:1 overnight margin and 4:1 intraday margin nowadays.
C2 allows 2:1 margin (always).
Currently it is not possible to create a trading strategy on C2 which makes use of 4:1 intraday margin.
> So can someone tell me how C2 calculate margin requirements and available equity?
C2 does it this way: If you buy stocks for $1000 it subtracts $500 from your buying power. So, after you spent 200% of your account value for securities your buying power is at zero and you can’t buy anymore.
"C2 does it this way: If you buy stocks for $1000 it subtracts $500 from your buying power. So, after you spent 200% of your account value for securities your buying power is at zero and you can’t buy anymore."
Yes I realize that. But what happens if stock price loose 1% in value? Would that trigger your margin call, because you don’t have free equity anymore?
For example:
You have $50,000 balance.
You decide to buy a 2000 shares of a stock @ $50 for $100,000.
Stock price fall to $49.
Now you have $49,000 of equity instead of $50,000 which will close some of your positions so that your open positions are $98,000 at the most.
Is my calculation right? Is this what C2 do when calculate margin of our systems?
Yes.
And C2 will issue a "simulated margin call"
And C2 will close some of your positions (randomly) some minutes later
And this will degrade (almost certainly) your performance
And it will put your model account out of sync with subscriber’s accounts
And will cause some trouble
… so beware…
Thanks Rene.
You can see currently I have buying power of 37K, but C2 only allows me buy stock wich values at less than a few K. It looks strange.
See, this is the message I got
Invalid Order
Problem with signal
Unable to BTO 200 FFN - Current account cash is $562.09; proposed trade requires cash of $940.00 (Stocks under $5 cannot be bought on margin.)(code=pre)
while I have almost 37k buying power.
Model Account StatusStarted $100,000
Buy Power $37,515
Cash $562
Equity $36,953
Cumulative $ $390,600
Total System Equity $490,600
Margined $0
Open P/L $36,953
As the error message explains, you also need enough simulated cash in your account to buy the stock. You have $562 in cash remaining. Further, in this case you need to pay the full amount in cash; in the C2 simulation, you can’t buy stocks on margin when they are less than $5.
Even if I buy stocks like PII which is over 110, I can not buy even 10 shares although I have 37k buying power. Then why does C2 say I have 37k buying power? What does 37 buying power mean here? Thanks!
There are many instrument classes that C2 supports. You may have buying power to purchase those alternate classes, but you still need to lay out cash worth 50% of the purchase in order to buy stocks. (You may not need to lay out cash to buy other instruments such as futures).
