Trading Margin Excess
Categories: Trading
You're a day trader who likes to use margin. In other words, you borrow money from your broker to make moves in the market.
You deposited $25,000 in cash and then took on another $25,000 in margin. In total, you have $50,000 with which to trade. You buy $40,000 of NFLX stock. You now have $10,000 worth of margin left to make another trade. This amount is referred to as your trading margin excess. It represents the additional margin you have unused, i.e. the funds you could still dip into to set some trades.
Now, that $10,000 isn't just a vanilla loan. It can only be used for trading (brokers allow a surprising amount of margin, mostly because they can use the traders' positions as collateral). So you can't just withdraw that $10,000 and go on a nice vacation, and pay it back later, like you can with a credit card. That's why all the funds in your account don't just mix together into a big pile. The broker keeps tabs on what amounts are your money and what amounts are margin. So the $10,000 amount sitting in your account has its own distinction as trading margin excess.
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five years same with Google and Facebook doing
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house...