Broker Detective Blog

Java L asked:


I just sold some shares on etrade yesterday. But i found the money is not available for investment today, although it is on balance. How long does it take to become available for withdrawal or investment on etrade? Any better broker? Thanks!

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StudyKid243 asked:


For example lets say I have 2000 dollars in my account and I want to buy a call option on ABC that sells at .35 with a strike price of 7.50. It is currently selling around 5.50. I buy 7 calls on it and later on ABC goes up to 10 dollars. Therefore I have to pay 7000 dollars to get my money. Is there a way where I could get that profit, such as using margin? Could you please explain any possibly ways of doing this?

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Jay asked:


Ok, I faxed a distribution request to my 401k Custodian requesting them to pay me my balance from my 401k as a rollover to an IRA. I meet all criteria. The problem lies in my address, as three months ago my physical address was undeliverable by the US Postal service, therefore, I called the 401k custodian to ask about this problem before faxing in the distribution form request, because the form states NOT to use a PO Box. My physical address is used for courier services like UPS or FedEX or DHL, but US Post Office wont deliver. The 401k representative said the funds would most likely be delivered a courier service requesting a signature for there proof and not to use the physical address or the request may be declined and/or delayed. I followed his instructions, and they ended up using the Post Office for the mailing. So of course the checks were returned as undeliverable (they ended up issuing a total of two checks to me) . The checks were issued out on May 18, 2009.

In the meantime, the US Post Offices have updated my physical address now as a deliverable address and I have started receiving mail made out to the physical address since late June. The custodian asked if I would like to have them re-mail both checks to my Post Office Box at which they would charge me a $35.00 stop payment/reissue fee for each check. I went back and fourth with them for a week, as I watched the market climb and climb, and asked if the custodian could simply re-mail the same checks they were holding to me before the 60 calendar date passed (because the IRS requires any retirement funds to be deposited into another retirement vehicle like and IRA withing 60 calendar days, or it is considered a direct distribution and subject to taxes and major penalties because I am under the age of 59 1/2 by the IRS). The 401k custodian states they re-mailed mailed me my checks on July 20th, which is now well past the 60 calendar days, and I have still not received my checks. I emailed a status back to the custodian, and they now want me to approve the checks to be stopped at a $35.00 fee each ($70.00 total) and reissued to my PO Box. What can I do? The amount is only a total of $6,000+ between the two checks, and attorney fee’s would probably cost me more than the $70.00 fee they want to charge me, and I am probably now subject to a 49% penalty by the IRS. This is there fault, not mine, so how can I place a formal complaint to the ERISA board’s or SEC, etc…? And how do I get my checks before the market peaks out and I am out of the market for any more time than is reasonable?

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InformedTrades asked:

your stop at 1.4260 would not have moved and you would have been executed on that order when the market touched 1.4260. As you can see from the chart below however, in this example the market did not pull back but went higher. As our stop is a 100 point trailing stop once the market moved up from 1.4360 the stop is going to continue to move up remaining 100 points behind the current price. If the market moves down however the stop does not move. So in this example once the market stoped …

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Roxann Colter asked:


Unheard of before this week. Are actual US Govt issued instruments at risk and are they the next to fall?

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goldenticker asked:

Learn how to buy stocks automatically when a stock hits the price you want to pay for it.

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Laughing Hyena asked:


There aren’t any etrade banks anywhere. I am setting up an account for my baby and want to take advantage of the 3.30 interest rate. I don’t have a bank account myself so I can’t send money electronically to the etrade acct. If I want to deposit a few dollars every week or so where do I bring it??

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jespi_78 asked:


This money is technically mine, and I know there is an option to borrow it while employed. I am now unemployed and getting turned down for educational loans. Can I use this money for school?

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Forex W asked:


Hi,

I’m new to Forex and just started working my way through babypips but I have a question that I can’t seem to find an answer to.

According to ibfx (not sure if url link is permissible here), margin level is defined as:

margin level = current equity in the account / current amount of margin in use

I’ve heard that brokers will make margin calls when margin levels are at 50%, sometimes 80%. I do not understand why this is the case.

I would think that as long as the equity in the account is equal to or greater than the amount required to open the position that the trade could be sustained.

I can see a margin call if a fluctuation of one pip would bring the equity below this amount but I do not see how a 50% margin affects this.

If someone could provide some example numbers perhaps it would help clear this one up for me.

Thanks,

Fortexwindo

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C o n f u c i a n asked:


Here is the situation:
I had $8,000 in my Scottrade account.
I had an additional $8,000 in margin

I bought 2,000 shares at $8 (1,000 with my own money and 1,000 on margin) for a total of 2,000 shares at $8 for a total of $16,000.

Here are recent closings of my stock:
Friday: $7.92
Monday: Market Closed for President’s Day
Tueday: $6
Wednesday: $5.84
Thursday: $5.03
Friday: $4.92

During the week I noticed my first maintenance call for $1,840.99 and so I added $2,000 in new funds to cover it.
Then later another for $1,752.99 and I again added $2,000 to cover it. So I added $4,000 last week to cover the margin calls.

However, on Friday when it closed below $5 it asked for a maintenance call of $4,861?
(1) Is this excluding the $4,000 I already added or do I only need to add $861 since I already added 4K?

(2) What is the maximum I will have to add to my account to cover a worst case scenario so that I can keep my 2,000 shares without Scottrade automatically selling some of them to cover the call? I borrowed $8,000 so I am guessing the maximum I would have to add would be around $8,000 + interest, and I looked up the interest and know that it is either 7.75% or 7.5%.

(3) Assuming that the $4,861 is a new margin call, excluding the $4,000 I already added, for a grand total of $8,861…..Isn’t this too high since I only borrowed $8,000? I am unsure but have all but concluded that since my stock dropped under $5, I now have to cover 100% or the entire margin call, but still, why would it be $8,861?

Some additional information:
The lady at Scottrade told me 65% was what I needed to maintain. She also told me I wouldn’t get a margin call unless it dropped under $5 and I got a margin call 2 times when it was above $5 so she obviously was misinformed.

Finally, looking back, there wasn’t much I could have done to prevent this situation. I bought in at $8 on Friday. It opened around $7.25 on Tuesday and I was waiting/hoping for a bounce: it ended up closing at $6 on Tuesday at which point I was set on being in it for the long haul (who would have sold for a 25% - one day loss and not just wait it out?)

Thanks a lot for answering my questions, I appreciate it.

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