Hello all,
I have a Margin Account. Been trading for awhile, but have run into some rough times with stock dropping, margin calls and depositing additional money.
1. If I deposit $10,000 cash, my buying power is $20,000. If I purchase $10,000 worth of X stock, is my account using $10,000 in my own cash to buy the shares, or $5,000 in cash and $5,000 in margin dollars automatically?
2. If I own X stock and it falls below required levels, I receive a margin call for $1000. The stock falls $500 further, so $500 disappears from my buying power/balances. If the stock raises again, it magically reappears. I was told that the money is "buying back" shares with my cash to eliminate Zecco's risk - but this transaction is not permanent. If the stock rises, the margin dollars take effect again and I get the cash back. I'm having trouble explaining the situation exactly, but is there a way to buy the shares that are currently under margin dollars with my own cash, thus absorbing all the risk of loss and avoiding the margin calls?
3. Is there a way in the trading center or account balances area to see exactly how much is owned via margin dollars and how much is owned via personal cash?
4. If Zecco were to shut down business, do I have any protection from complete liquidation? Would I receive any warning, or given an opportunity to purchase the shares that are currently in margin dollars to keep for myself?
I appreciate any insight in advance - thanks very much.
J