I need a little help!
I trade US stocks via spread betting from the UK and I’m looking to sell my system. As C2 does not support spread betting I guess the only way I can convert is by creating a stock system.
I would just like to know, when opening a stock position, say buy $3000 worth of shares in company A, if I had a stop order which meant I would loose no more than $500 would my operating bank have to ‘put up’ the full $3000 or just the amount I would potentially loose?
Thanks in advance
Greg,
I would just like to know, when opening a stock position, say buy $3000 worth of shares in company A
C2 uses SPAN margin, but as rule of thumb it’s 2:1 margin for stocks over $5. i.e. you would need $1.5K for a position that worth $3K.
if I had a stop order which meant I would loose no more than $500
it’s wrong assumption for stocks. You can loose much more than your stop in a gap between sessions. i.e. you have a stop $500 for $3K position. The stock opened 30% down on news. It would trigger your stop and you will be filled by open price or worse. So you would loose $1K or more with $500 stop in place.
On bright side if you have a system for CFDs it might be converted to stocks and you can even have better results.
Eu
