Not enough Buying Power to place Stop Loss when I'm short

[benpic96 0]

Hello Everyone,

I'm simulating on DAS right now and have a question regarding my stop loss order when I am short on a stock.

So I'm using the actual buying power I'll have and when I go short and want to place a stop loss to be smart and safe, it says I can't because I don't have enough buying power.

Should I get a margin just to be able to place a stop loss order when I'm short?

 

Thanks

 

Edit: Hi Everyone!

I'm all good, I had a bad script in my Hotkeys.

 

Cheers

Edited September 11, 2023 by benpic96
I messed up :) Hotkeys had issues

[skubik007 0]

hello TEAM,

 

I'm facing similar issue, i.e. I've just noticed in my DAS Sim that I wasn't able to short two very liquid stocks yesterday Jan 4, 2024 (WBA and MARA) -> relative Volume on WBA was at some point more than 500%, I tried to short the stocks using hotkeys with stop loss and not possible (tried it a few times at different times). I thought initially that something is wrong with my hotkeys but then I tried to short AMZN, BABA and all worked perfectly, so I started wondering what is the issue? (we are talking about shorting 100 shares)

Any ideas? 

 

[juantejada 0]

Hello, it has happened to me and found that has relation to buying power and also that not also varies from stock to stock, but also in the same stock you have more margin for a long versus a short, or vice versa.  

Ex.  with an X amount of capital I have margin (BP)  to buy AMZN for $100k worth of stock - for a short, I have BP for $90k worth of stock.  But then, with MARA, with the same amount of capital, I have margin (BP)  to buy AMD for $15k worth of stock - for a short, I have BP for $12k worth of stock.

Check out in your broker (ex IB) what is your buying power and margin for every stock you are interested, long and short, and then the question would be where to place the stop point for an entry using a hotkey as the equalized risk, 

In this case, what I learned was that, depending the number of shares I want to long or short using the EQ risk hotkey, If the Stop Loss point placed at the technical level for the trade didn´t  place the order, it was because the position size that resulted from the stop loss placement and entry price exceeded the buying power of that particular stock - for a long or short trade -.

So with that I learned to know from time to time the buying power I might have for the stocks I like (it changes for longs and shorts) and to place the stop point with the EQ risk hotkey farther than the technical level in the stocks that I have less buying power.  With some testing and experience you will grab the proportion of price that you need for every stock or, you can calculate it for each stock knowing that for MARA for instance, you need a stop placed $00.50 cents from the entry point to use your full buying power in a long.

Hope it helps you.

 

[skubik007 0]

thanks, juantejada, that's helpful!

I thought the no. of shares I can buy/sell is automatically adjusted depending where I place my stop, so If my stop is very narrow and the equation shows me that I can buy/short higher amount of shares than my BP, then no. of shares will be limited to my BP