Actions

  Print Article
  BookMark Article

Categories    Category List

Arts & Humanities
  Books & Authors
  Dancing
  Genealogy
  History
  Performing Arts
  Philosophy
  Poetry
  Theater & Acting
  Visual Arts
Beauty & Style
  Fashion & Accessories
  Hair
  Makeup
  Skin & Body
Business & Finance
  Advertising & Marketing
  Careers & Employment
  Corporations
  Credit
  Insurance
  Investing
  Personal Finance
  Renting & Real Estate
  Small Business
  Taxes
Cars & Transportation
  Aircraft
  Boats & Boating
  Car
  Insurance & Registration
  Maintenance & Repairs
  Motorcycles
  Rail
Computers & Internet
  Computer Networking
  Hardware
  Internet
  Programming & Design
  Security
  Software
Consumer Electronics
  Camcorders
  Cameras
  Cell Phones & Plans
  Games & Gear
  Home Theater
  Music & Music Players
  PDAs & Handhelds
  TVs
Dining Out
Education & Reference
  Financial Aid
  Higher Education
  Preschool
  Primary & Secondary Education
  Special Education
  Studying Abroad
  Teaching
Entertainment & Music
  Celebrities
  Comics & Animation
  Horoscopes
  Jokes & Riddles
  Magazines
  Movies
  Music
  Polls & Surveys
  Radio
  Television
Environment
  Alternative Fuel Vehicles
  Conservation
  Global Warming
  Green Living
Family & Relationships
  Family
  Friends
  Marriage & Divorce
  Singles & Dating
  Weddings
Food & Drink
  Beer, Wine & Spirits
  Cooking & Recipes
  Ethnic Cuisine
  Vegetarian & Vegan
Games & Recreation
  Amusement Parks
  Board Games
  Card Games
  Gambling
  Hobbies & Crafts
  Toys
  Video & Online Games
Health
  Alternative Medicine
  Dental
  Diet & Fitness
  Diseases & Conditions
  General Health Care
  Men's Health
  Mental Health
  Optical
  Women's Health
Home & Garden
  Cleaning & Laundry
  Decorating & Remodeling
  Do It Yourself (DIY)
  Garden & Landscape
  Maintenance & Repairs
Local Businesses
News & Events
  Current Events
  Media & Journalism
Pets
Politics & Government
  Civic Participation
  Elections
  Embassies & Consulates
  Government
  Immigration
  International Organizations
  Law & Ethics
  Military
  Politics
Pregnancy & Parenting
  Adolescent
  Adoption
  Baby Names
  Newborn & Baby
  Parenting
  Pregnancy
  Toddler & Preschooler
  Trying to Conceive
Science & Mathematics
  Agriculture
  Astronomy & Space
  Biology
  Botany
  Chemistry
  Earth Sciences & Geology
  Engineering
  Geography
  Mathematics
  Medicine
  Physics
  Weather
  Zoology
Social Science
  Anthropology
  Dream Interpretation
  Economics
  Gender Studies
  Psychology
  Sociology
Society & Culture
  Community Service
  Cultures & Groups
  Etiquette
  Holidays
  Languages
  Mythology & Folklore
  Religion & Spirituality
  Royalty
Sports
Travel

Online Now    Online Now

Author Login    Author Login

Welcome Guest! Please login or create an account.

Username:

Password:



Navigation    Navigation

ADS    Featured Author

ad

ADSDisclosure

What is the purchase of stock using only a down payment called?

Author :

Submitted : 2018-06-15 00:30:13    Popularity:     

Tags: stock  purchase  called  payment  

Buying on margin, however its not for beginners I think you're referring to margin. In North America there is no such things as buying stock

Answers:

Buying on margin, however its not for beginners

I think you're referring to margin.

In North America there is no such things as buying stock (or any other security) with only a "down payment".
The purchase of any security must be paid in full on or before the settlement day of the trade. OR a proper margin deposit must be made in the account. Not all customers are approved for margin accounts.

To open a margin account you must have the PRIOR approval of the Brokerage firm, be prepared have in the account the greater of 50% of the purchase amount or $2,000. This is the law as set by the Federal Reserve and can not be changed by any broker/dealer.

Federal law dictates that margin accounts must maintain minimum equity of 25% of the market value, most broker/dealers require a minimum equity of at least 30%.


So, there is no such thing as "a down payment" for purchasing securities AND if you don't under margins - do not even apply for such an account,

ALSO not all securities are acceptable for a margin account, among them are securities whose market price is less than $5 a share.

It is called "Margin," but don't attempt using it unless you are VERY sophisticated. The broker will charge you a fee for a margin account, and if a margin stock drops in value, you could be screwed!

No such offer from any source to buy stock with down payment !
Transaction must be completed within 3 days after a confirm of buying. Bank might allow customer paying interest charge if customer has not paid in full the stock was bought after three days deadline provided this customer has high enough value owned fund or stock were kept under the same cash account. Open a margin trade account is the better way.

It is called buying on margin. An account needs to be set up to allow it and the brokerage firm can use credit rating and account assets to determine the amount of money. Shares bought on margin are used as collateral to buy additional shares, which also are collateral for the loan. If the share price drops below a certain point, your margin is called and you must put in additional money or the shares are sold, and you are responsible for all money loaned if the price falls too quickly that the down payment was not enough.
A similar result under a different scheme is called buying options. An option to buy a certain number of shares for a certain time period, generally 100 shares expiring at quarter end dates. The option cost money is gone when you spend it and own the option which can be re-sold, but as expiration date approaches if the stock price has not gone up, the option loses value in resale because the time period is shrinking. However, in buying an option, the most you can lose is the option cost. In buying on margin you can lose the full number of shares if the share price drops to zero.

Both buying options and margin buying involves leveraged control of shares. In the option, you do not actually own the shares. It is an ability to buy them at a certain price. If the stock price rises, so does the value of the option.
Suppose a stock is $100 a share. An option to buy 1000 shares at $110 per share in 90 days may cost $5000. If in 30 days there is still 60 days left on the option and if the market price per share is $115 for example, the option can be worth $5000 for the $115 to $110 plus maybe another $10,000 for the 60 days to buy at $110. Your $5000 investment may be sold for $15,000. To control 1000 shares at $100 per share is $100,000 to buy as between a down payment and margin loan. You cannot usually do it with only $5000.

Option investing is more common than buying on margin. The difference is whether you own the shares in a collateral loan or only own a choice to buy them at a certain price and date and an option is commonly resold. If the share price stays the same or goes down, eventually the option is worthless. If the share price stays the same, you can resell the shares and only lose a little loan interest.

I hope I explained it well enough to look at both far more closely before doing either. I expanded the question to a common activity that is similar as controlling more shares without putting the full money up.

Buying on margin https://www.google.co.uk/search?q=buying...



Good
Back Homepage
Back


Article Source:
www.Aphotolog.Com

Answer Questions