Archive for 'Investing on Margin' Category
IRAs is not allowed to trade blue chip stocks on margin
Trading blue chip stocks on margin is not permitted in Individual Retirement Accounts (IRAs) or other qualified retirement plan accounts. Increased (and increasing) buying power generated by an appreciating stock portfolio can be a very important aspect of portfolio management that’s not always understood by the majority of investors. For example, it you made a [...]
Why trade blue chip stocks on margin?
Now that you know the rules, what about the reasons. Why trade blue chip stocks on margin? Assume you have $10,000 and you want to buy some stock. If you do so in your margin account with $10,000 in equity, you could buy $20,000 worth of stock. If your $20,000 margined stock portfolio increases in [...]
Trade blue chip stocks on margin
One of the most widespread misunderstandings about investing in blue chip stocks is that you have to be wealthy to do it. That couldn’t be more wrong. In fact, anyone can invest in blue chip stocks—you can even borrow money to do it. When you borrow money to invest, it’s called trading on margin. Essentially, [...]