UNSETTLED FUNDS Question-Can I trade ON Margin?? No TAX on PROFITS?

sprite said: "I have UNsettled funds and want to trade today. I have $500 of unsettled funds, if I did a margin, i would have $1,000. ANd if i trade only up to $500, Its still okay to do so regardelss of me having unsettled funds right? And is it okay to trade up to $1,000? Scottrade says the interest for .$0.01 - $9,999.99 base rate(10.50%) less 0.25% = 10.25% So that means if i borrow $500, my interest for ONE day is $51.25 ? Or is 51.25 over a 365 day period? Lastly, I heard that if I trade with margin, and return the money the same day, I will not be taxed on those profits? thnx"

thezster said: "[QUOTE=sprite] Lastly, I heard that if I trade with margin, and return the money the same day, I will not be taxed on those profits? thnx[/QUOTE] HAHAHAHAHAHAHAHAHAHAHAHAAAAAAA......................."

thezster said: "[QUOTE=sprite]I have UNsettled funds and want to trade today. I have $500 of unsettled funds, if I did a margin, i would have $1,000. ANd if i trade only up to $500, Its still okay to do so regardelss of me having unsettled funds right? And is it okay to trade up to $1,000? Scottrade says the interest for .$0.01 - $9,999.99 base rate(10.50%) less 0.25% = 10.25% So that means if i borrow $500, my interest for ONE day is $51.25 ? Or is 51.25 over a 365 day period? [/QUOTE] If you have a margin account allowing 2X capital - then the $500 you have should be available for purchases. Depending on your situation - you might have $1000 available. Neither is worth spending, in my opinion. Nonetheless - you are allowed to purchase stocks on unsettled funds... but you can't sell them until the funds are settled. The rate of interest is yearly."

thezster said: "[QUOTE=sprite] Lastly, I heard that if I trade with margin, and return the money the same day, I will not be taxed on those profits? thnx[/QUOTE] I'm truly sorry, but that's the funniest thing I've heard in a long, long time... :p You will be taxed on every dime you make over the course of the year.:rolleyes:"

sprite said: "OOPS.. no, i meant to say i WONT HAVE TO PAY INTEREST on the Margin if i return it the same day... NOT tax! ha. damn a BAD typo"

thezster said: "That would depend on your broker and their specific rules."

crankitdb711 said: "I really don't recommend trading on margin until you are in baller status and don't care about your money."

JohnL said: "[QUOTE=crankitdb711]I really don't recommend trading on margin until you are in baller status and don't care about your money.[/QUOTE] Why? I'm on 40% margin right now and care about my money. No risk no reward man."

crankitdb711 said: "[QUOTE=JohnL]Why? I'm on 40% margin right now and care about my money. No risk no reward man.[/QUOTE] There's something about investing/trading (ie. gambling with) money that isn't yours that gets me. Booo to the interest rate too."

thezster said: "[QUOTE=sprite] Scottrade says the interest for .$0.01 - $9,999.99 base rate(10.50%) less 0.25% = 10.25% [/QUOTE] Wow, I just read the "fine print" of the post... that's a pretty steep margin rate you've got there..... Margin is fine - as long as you can discipline yourself not to abuse it. JohnL uses margin a lot - as do I - but He's been doing this for a while - and seems to be getting pretty good at it. He's not your typical 17/71 (whichever it is) year old."