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How to manage portfolio with margin account?

Posted: Fri Sep 13, 2019 9:03 pm
by oem7110
I would like to know on any guideline on how to manage portfolio with margin account.

Does anyone have any suggestions?
Thanks in advance for any suggestions

Re: How to manage portfolio with margin account?

Posted: Mon Sep 16, 2019 5:50 pm
by Roger Rines
Both Futures and Stocks can trade using a margin amount.

Future Contract margins are determined by the Exchange and sometimes adjusted by the Broker. There is also an Initial Margin value that is different from an active position's Margin amount.

Stock margins are usually the percentage of purchase cost required to purchase a stock. For example, the default Leverage Fraction in the Trading Blox Money Manager section uses 1. That value states the entire cost of a stock is consumed from the equity account for the number of shares purchased. When the value is 2, the amount taken from the equity account is half. The remaining difference is carried as a broker-loan that often carries an interest rate. Leverage is the divisor value used to determine how much cash the account uses. The loan amount is the difference that is left after the cash amount is deducted to cover the account's cash contribution.

When you asked, "I would like to know on any guideline on how to manage portfolio with margin account." It isn't clear if you are asking about Futures or Stocks, and why you are focused on the Margin management.

When you mentioned the "Portfolio" the message I get is the entire money allocation of all open positions that are active at the end of trading each day.

Write a little more about what is important to you, the class of instruments you are trading, and how you intended to keep track of the amount of margin that is active. For example, if you keep the Futures Dictionary updated to the current margin values, you could easily create an After Trading Day loop process that calculates the margin value for each active Futures position. You can do this in Stocks as well, but the process is different because the margin is based upon the loan's Leverage Rate and the value of the stock on the day of purchase.