Question : 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
- asked by Jamie J
All Answers:
Answer #1
No, you can not borrow money to trade in themarkets. However, if you tell the bank or anyother lender that you want a home loan, then usethe money for trading, they really will not know. Also once you have a fully paid account with abrokerage account, lets say $100,000 worth ofstock, you can then borrow 50%, of that value, orin this case $50,000 and use that money fortrading options. This is called margin tradingand can be risky. The 50% that you borrow, mustbe paid back either with cash or by selling thestocks in your portfolo.
- answered by BangkokBob
Answer #2
I would say..Don't Do It !!! By taking a loan,you are already down the interest you will have topay back. And if the market goes flat and youtake losses, then you will being paying back aloan for nothing. Never invest on a loan. I knowyou don't want to hear that, but it makes nofinacial sense at all. Get a second job andinvest your earnings. If you have a 401 K plan atwork and it matches your contributions, use thatfirst (that's a 100% return right there) thereare plenty of ways to do this without taking aloan.
- answered by big one
Answer #3
Take out a home equity line of credit. If itcosts you 7% and you can make 15%, then you areahead 8%. Just tell the bank you want to makehome improvements. Then, just write checks toyourself and forward the money to your brokeageaccount.
- answered by InvisibleWar
Answer #4
It's called buying and selling on Margin but it'squite risky.
- answered by JSan521704
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measure and fulfill your financial needs
