Trade Entry: Short Term Stock SystemBuy Power: $57,912
Above is what I read …however system is not permitting buys with margin
Hi Stock Trader:
On C2, you need two things to place a BUY stock order:
1) Available Buy Power.
2) Available Cash.
You have #1, but not #2.
Here’s a very simplified example of how it might work. Imagine you start with $100 of cash. You’ll see that you also have $100 of Buy Power.
Now, you purchase 10 shares of stock for $6 per share. You’ll notice that in your Model Account, your cash only reduces by $30 (not $60), because you are effectively buying the other half of your stock position on margin. Thus your cash reduces by half the amount of the stock value you purchase.
However your Buy Power is affected by other positions you might hold which require some kind of surety (short stock positions, futures positions, forex, etc) - and is also affected by open P/L on positions you currently hold.
This margining system, admittedly a bit confusing with its three buckets (cash, buy power, margined amount), is made necessary because C2 lets you trade multiple instrument classes against one Model Account, and the margining/borrowing regimes of each instrument class is different. So it looks a little strange at first glance, but it does approximate the real world pretty closely, and it ensures that Model Accounts stay within available-margin boundaries.
But the main message of this post is to explain how C2 allows you to buy stock “on margin” in the Model Account: it happens automatically, by effectively reducing cash and Buy Power by only half the face value of the stock. But even so, you still need to have half the cash amount available to buy stock.
