Noob question regarding Margin Interest on Overnight/Swing Trades

[misterchai 8]

I assume that if you take an overnight position you are charged interest on the margin, the amount being broker dependent. Is there a DAS setting to switch to using cash only on longs, and not margin as buying power?

 

Thanks 

[Kasper 13]

No, you would have to set-up a cash account with your broker.

Kasper

[misterchai 8]

And then link that to your platform, got it thanks Kasper

[Farsheed 0]

Just to verify, there is no margin interest on intra-day trading, correct?

[peterB 154]

correct but there is one more fee for taking out money from the market called ECN fee

 

ECN fees do not apply on every trade: they are only charged when a buy or sell order “removes liquidity.” What does that mean? An order that removes liquidity is one that is likely to be filled immediately. That includes all market orders, where the investor simply accepts the current price without specifying a minimum or maximum. It also includes marketable limit orders. A marketable limit order specifies a price that is either above the ask (when buying) or below the bid (when selling). Like a market order, this type of limit order will usually be filled right away.

Now consider a limit order with a price that is lower than the ask (when buying) or higher than the bid (when selling): this is called a nonmarketable limit order, since it is not likely to be filled immediately. It will sit on the exchange’s order book waiting for someone to agree to the price being offered. Therefore, it “adds liquidity” to the market.

In most cases, whenever a trade is filled, one party adds liquidity and the other removes it. Only the latter will be charged ECN fees.

[saoer.sinaga@gmail.com 2]

Sorry for redundant question. I still don't get it. Let's say I have a margin account. When I keep my long position (within my equity, not taking margin) overnight, do I still have to pay interest ?

If yes, that means swing trading is very expensive.

When I have open order, what happens if I switch my computer off.

[Bryan W 37]

On 7/13/2020 at 1:34 PM, saoer.sinaga@gmail.com said:

Sorry for redundant question. I still don't get it. Let's say I have a margin account. When I keep my long position (within my equity, not taking margin) overnight, do I still have to pay interest ?

If yes, that means swing trading is very expensive.

When I have open order, what happens if I switch my computer off.

I'm not sure about the interest if you aren't using margin, I wouldn't think there would be any, but your brokerage should be clear about the rate somewhere on their site. 

Unless you cancel your order, or it hits its expiry, it will remain open even with your computer or trading platform shut down. I'll attach an example of available times in force on DAS trader. For example, if you select DAY as the expiry, unless that order gets filled, it will cancel at 4pm Eastern. If you select GTC, the order will remain open until it's filled or you manually cancel it. 

[bibekpillai 0]

Hello,

I am very new to day trading and have been trying to study all the lingo related to the broker accounts, rules and strategies related to day trading. I did have one particular question and that is related to interest rates on margin accounts. Let me ask my question with the help of an example, let say i have $2,500 in my account with a leverage of 6:1. This means i have a buying power of $15,000. Now $15,000 - $2,500 = $12,500, is the amount of money i owe to the broker for the buying power. My question is, does the interest rate kick in for $12,500 amount? If not then how does it work?

[peterB 154]

for the leverage you do not pay an interest if you daytrade. If you close your position before end of the day then you have not borrowed any money. If you keep the money overnight you pay the interest as you correctly counted. you need to know your interest rate if it is per annum or per diem when you count it. Or you try it one day and see the rate on your report

https://www.investopedia.com/ask/answers/07/margin_interest.asp