Question by Jamie J: Is it possible to get a loan for a stock trading account?
I’m new to trading. I’ve taken a class in options trading and am reading everything I can on trading, timing, money management etc. I want to start out with a sizeable account ~$ 20,000.00 so I won’t get knocked out quickly while I’m getting the feel for the market. Is it possible to get a loan for these purposes? Since stock trading can be considered a business does anybody know if there is a small business-type loan for stock trading purposes. Any help would be of great help. I know I will be able to perform well in the market. But it is difficult to save a sizeable trading account when you have bills, mortgage etc. Thanks
Answer by BangkokBob
No, you can not borrow money to trade in the markets. However, if you tell the bank or any other lender that you want a home loan, then use the money for trading, they really will not know.
Also once you have a fully paid account with a brokerage account, lets say $ 100,000 worth of stock, you can then borrow 50%, of that value, or in this case $ 50,000 and use that money for trading options. This is called margin trading and can be risky. The 50% that you borrow, must be paid back either with cash or by selling the stocks in your portfolo.
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