Notice: Use of undefined constant name - assumed 'name' in /home/vo7ovcom/share/PHP/Ban/MathForm.php on line 112

Notice: Undefined variable: name in /home/vo7ovcom/share/PHP/Ban/MathForm.php on line 112
Cannot Use Day Trade Buying Power on Leveraged ETFs

:


Add Comment | Related Links | TrackBack
Related Content

Cannot Use Day Trade Buying Power on Leveraged ETFs

Learned the hard way yesterday that you can't use Day Trade Buying Power (DTBP); at least, not with TD Ameritrade. You can still use margin buying power with leveraged ETFs, but the margin requirement is the same as the ETF leverage. The following is TD Ameritrade's explanation of it all:

"Effective December 1, 2009, FINRA is implementing increased customer margin requirements for leveraged ETFs in accordance with NASD Rule 2520. This is an industry-wide regulatory change that will affect buying power and could potentially create margin calls for clients holding these securities. The FINRA notice can be found at http://www.finra.org/web/groups/industry/@ip/@reg/@notice/do . . . In response to the FINRA guidance, TD Ameritrade has decided to make the following changes:

  • All leveraged ETFs will be set to a margin requirement equal to 2X or 3X the TD Ameritrade base maintenance requirement of 30% (not to exceed 100%).
    • 2X = 60%
    • 3X = 90%
  • The TD Ameritrade base maintenance requirement for naked options will be multiplied to correspond with the equity margin requirement.
    • Naked Calls:
    • Greater of:
    • 60% or 90% of market value of deliverable + option value - out of the money amount (if any)
    • Or
    • 10% of market value of deliverable + option value
    • Naked Puts:
    • Greater of:
    • 60% or 90% of market value of deliverable + option value - out of the money amount (if any)
    • Or
    • 10% of strike price + option value
  • All leveraged ETFs will be ineligible for use of DTBP
  • Margin calls will be generated for any accounts with equity that is less than the margin required. Standard due dates will be assigned."

Job
Wed, 09 Dec 2015 01:36:01 -0800

Add Comment | Related Links | TrackBack
Related Content

Did your message disappear? Read the Forums FAQ.

Add Comment

Spam Control | * indicates required field
Your Name: *
E-mail:
Remember Me!
Comment: *
File attachment is optional. Please do not attach a file to your submission unless it is relevent.
Attach File:
(64 MB Max)
Spam Protection: * Answer of 4 - 1?
Click button only once, please!

TrackBack

Send Ping | TrackBack URL | Spam Control

No TrackBacks yet. TrackBack can be used to link this thread to your weblog, or link your weblog to this thread. In addition, TrackBack can be used as a form of remote commenting. Rather than posting the comment directly on this thread, you can posts it on your own weblog. Then have your weblog sends a TrackBack ping to the TrackBack URL, so that your post would show up here.

Messages, files, and images copyright by respective owners.