No changes in maintenance requirements on TSLA by Fidelity, at least since March of last year when I started using margin. I also found out by chance that buying certain puts increases available margin, but did not take the time to fully understand the mechanics of it. I was able to use this several times by experimenting with different put strikes using their margin calculator.
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vgrinshpun - I was reading that Fidelity adds an extra 30% add-on margin requirement for accounts with concentrated holdings of 75% or more in one stock (Trading FAQs: Margin - Fidelity). This is in addition to their standard 30% margin maintenance requirement. Have you experienced this?
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Thanks. I'll put Vanguard on my blacklist. Do you know what their maintenance requirement for TSLA was raised to? Do they have an add-on requirement for accounts with concentrated holdings?
Most certainly :smile:. My TSLA position has an elevated 40% margin requirement. I believe that the normal requirement (for non concentrated positions) is 30%. I am very careful with leaving a cushion, and despite using margin quite often, had never had any type of call yet.
Thanks. Fidelity scares me because of the concentration add-on margin requirement which would be 30% for me in addition to their existing 30% margin requirement. And then I fear them raising that 30% to 50% for TSLA in a time of great volatility (stock drops over 50%) and that would make my margin requirement 80%.
I think you are misinterpreting Fidelity margin requirements. My TSLA position is 98% percent of the holdings in one of the fidelity accounts and my TOTAL margin requirement is 40% vs. normal 30% for other positions. It is not 30%+30% = 60% as you seem to assume.
I am also absolutely certain that their margin requirements were not changed during high volatility time when IB raised their margin maintenance requirements.
I am also absolutely certain that their margin requirements were not changed during high volatility time when IB raised their margin maintenance requirements.
Hmm, that's strange. Maybe I'm misreading it, but I just read Fidelity's margin requirements over again and it does seem like your margin requirement should be 60% if your TSLA holding is 98% of your holdings.
"Example: If you purchase $20,000 of marginable stock with a 30% house margin requirement, you would need to initially deposit $10,000, which is the 50% Fed requirement. You would not need to deposit additional money beyond the $10,000 because the house maintenance requirement is below the 50% Fed requirement.Let’s say, however, the security purchased now makes up 80% of the gross market value of your portfolio. This security would be subject to an RBR add-on of 30%, bringing the house requirement to 60%. Since the account has a maintenance requirement higher than the Fed requirement, you would need to deposit funds to meet the higher requirement, rather than 30%. In this example, the security purchased increased the house maintenance requirement to 60%, requiring a deposit totaling $12,000. This amount is equal to 60% of the purchase price."
mershaw2001
I'm short the short sellers
I've been at fidelity for 3 years and have had a margin call due every other day. I've had times when I had 150k in the account and using leverage I've had at least 200k in tesla and at least another 100k in other stocks and options.
They have been great. Never changed the margin requirements for tesla. They did change the margin requirements once for a drug company- they called me up that day to let me know. I do get periodically sold out, mostly when i miscalculate a margin call and only once when i didn't have a call because I doubled down with a 50k margin call due the next day and they thought I was too risky. other than that, I think fidelity pretty much lets me do my thing and they are really, really good about tesla.
They have been great. Never changed the margin requirements for tesla. They did change the margin requirements once for a drug company- they called me up that day to let me know. I do get periodically sold out, mostly when i miscalculate a margin call and only once when i didn't have a call because I doubled down with a 50k margin call due the next day and they thought I was too risky. other than that, I think fidelity pretty much lets me do my thing and they are really, really good about tesla.
This is interesting indeed. My Margin Calculator screen lists TSLA requirement at 40%, while this position is 98% of the total of that account. I will investigate, call Fidelity if necessary, and post an update (would be a nice test of their customer support, which was always superb for me).
This is might have something to do with the fact that TSLA (excluding options) that is being added on margin will add margin as it will be counted for a calculation of new basis before applying the margin requirement percentage, but this is just a theory off the top of my head. I will check it out and post an update.
Chickenlittle
Banned
I recently switched from schwab to fidelity. Loyal schwab account for over 5 years. Over hundred trades a year with CASH balance on average 5 million with more than that in securities. Cash carries less than one tenth of a percent interest. Had an idea to ask for free trades since I had never asked for anything before. I asked for what I thought was crazy (1000 free trades). My local broker said sure but he had to check with corporate. Corporate called me back and said they couldn't. They suggested I call around and they would match my best offer. I asked if they could extend any but they only said that I would have to call around to find someone else's offer. I told them that if anyone offered me more, I would go with them since without knowing me they would give me more. They asked why I wouldn't work with them and told them I had for 5 years done that. The next morning I heard a schwab tv ad offering new accounts 300 free trades, no mention of balance requred. Fidelity offered me cash and 500 free trades. Don't be afraid to shop your business around. Loyal customers are taken for granted
Thank you all contributors for sharing your experience with different trading accounts. Trading tools are quite relevant and it is great to be able to hear from investors on this forum.
The factors that I found relevant when comparing different accounts:
- the cost per trade is relevant, but generally most brokerages are competitive, so trading cost is not my primary concern, as it is usually insignificant for my orders
- order execution is more relevant to me than the trade cost, as good execution often provides more benefit
- good order control, visibility of the market, ability to change order limit price in response to market moves instantaneously. Some accounts that I had were so bad that I was not sure if my order was accepted, the order visibility was atrocious. Something like that affects trading ability a great deal.
- free data feed (or cheap)
- access to all trading instruments
- ability to place various types of orders or automated trading (so I can go back to sleep)
- access to most relevant world markets
- quick and easy way to transfer holdings, easy funding and withdrawing money out
- clear, customizable reporting
- good training on how to use the platform
- 24hrs phone support
- both web platform (so I can place orders whilst at work, if I have to) and fancy customizable trader workstation for home computer
- secure access, codes are a must
- margin rate, but this one is not relevant to me as I have cash account only
I am very happy with IB so far. The only problem with IB is that as non US citizen I can have only cash account. Maybe that is for my own good.
The factors that I found relevant when comparing different accounts:
- the cost per trade is relevant, but generally most brokerages are competitive, so trading cost is not my primary concern, as it is usually insignificant for my orders
- order execution is more relevant to me than the trade cost, as good execution often provides more benefit
- good order control, visibility of the market, ability to change order limit price in response to market moves instantaneously. Some accounts that I had were so bad that I was not sure if my order was accepted, the order visibility was atrocious. Something like that affects trading ability a great deal.
- free data feed (or cheap)
- access to all trading instruments
- ability to place various types of orders or automated trading (so I can go back to sleep)
- access to most relevant world markets
- quick and easy way to transfer holdings, easy funding and withdrawing money out
- clear, customizable reporting
- good training on how to use the platform
- 24hrs phone support
- both web platform (so I can place orders whilst at work, if I have to) and fancy customizable trader workstation for home computer
- secure access, codes are a must
- margin rate, but this one is not relevant to me as I have cash account only
I am very happy with IB so far. The only problem with IB is that as non US citizen I can have only cash account. Maybe that is for my own good.
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I'm from Norway in Europe, and have had no problems opening a portifolio margin account at IB. Opened it just about a month ago.
I am glad for you Wenche, make the most of it. Unfortunately in Australia IB does not have a permission from ASIC to give locals margin accounts. It seems that IB had a wrong licence in Australia. Hopefully that will be sorted out.
In a way having no margin is ok with me as I do not fully trust myself.:biggrin:
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Market Data Subscriptions for TSLA on Interactive Brokers (Non Professional) Help !
I just switched to IB and I am looking at which Market data subscription I should get. I need real time data on nasdaq stocks and options. I have never seen L2 trading and I am not sure what that is about but I would love advice on what ya'll think the best bet would be for cheapest data and maybe someone's take on the L2 data and if its worth paying extra for it.
Thanks for any help,
Blake
I just switched to IB and I am looking at which Market data subscription I should get. I need real time data on nasdaq stocks and options. I have never seen L2 trading and I am not sure what that is about but I would love advice on what ya'll think the best bet would be for cheapest data and maybe someone's take on the L2 data and if its worth paying extra for it.
Thanks for any help,
Blake
mershaw2001
I'm short the short sellers
Chickenlittle
Banned
Mershaw/ChickenLittle,
If you guys think they are 'free' please read "Flash boys" by Michael Lewis. around page 180 is where he cites some really juicy material on the online retail brokers and what they are doing with your 'free' orders. The larger the orders the more money they make selling it to HFTs and the worse avg price you get on a market order, or in the case of a limit order the more likely you will not get filled even if the market comes down to touch your limit price and then goes back up(that is a huge opportunity cost by the way if you think about it).
if you really want to drill down to what true 'transaction costs' are then please read/digest this letter sent to the SEC last month by the chairman/founder of Interactive Brokers:
https://www.interactivebrokers.com/download/execution_stats_comment_letter.pdf
if either of you are interested in learning more about what your true 'transaction costs' are or in opening an account with IB (even for testing) then please PM me your email address and I'll be happy to discuss.
Hi Blake, I opened my account at IB about a year ago. I didn't ask for the level 2 (L2) trading, but marked for subscription in front of every free option. The only one with fee, that I subscribed, was the real time market data for Nasdaq, including some other stock exchanges. I think it was only $10/month, and waved, if you use the same amount or more in transaction fee. I think I received an e-mail, not long ago, that informed they would not charge, if you have a certain level of balance in your account. I have never seen the subscription fee drawn out of my account, and there have been several months where I've done less than 10 trades. I get all the information I need real time, but it took me some time to get to know the platform, and build the mosaic windows according to my needs.
Chickenlittle
Banned
Agree but my trades are executed just as all the other fidelity trades are but no commission that others pay
Yes, but unless you are doing small trades the 'commission' is just a very small proportion of the money they make off your trades. They could let you trade 'for free forever' and your actual cost would still be very high for each trade...read that Flash Boys book...it's entertaining as well.
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