Hi guys,
It would be wonderful if Alpaca can provide the margin requirements for a stock. For example, TQQQ requires a 100% margin and this totally impacts your day buying power.
Thanks,
Luca
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It has this in the document but doesn’t mention 1x ETF, short of ETF, or may be some ETF need 100%. I would like to know a more complete picture as well.
| Position Side | Condition | Margin Requirement |
|---|---|---|
| Long | share price < $2.50 | 100% of EOD market value |
| Long | share price >= $2.50 | 30% of EOD market value |
| Long | 2x Leveraged ETF | 60% of EOD market value |
| Long | 3x Leveraged ETF | 90% of EOD market value |
| Short | share price < $5.00 | Greater of $2.50/share or 100% |
| Short | share price >= $5.00 | Greater of $5.00/share or 30% |
I noticed NIO and TSLA have 100% and 40% maintenance margin respectively. Most of the volatile stocks have margin larger than 40%. Such high margins completely interfere with trade strategies that combine overnight and intraday positions. The results of back testing don’t match the actual trade anymore in this situation. The maintenance margin rate information must be included in the Asset object.
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Alpaca docs have a different table, which is less logical:
For example, 2x Leveraged ETF have a margin of 100% rather than 60% of EOD market value. It makes little sense to me but it looks like those are the rules that they actually enforce. However, their table says nothing about inverse leveraged ETFs (-1x, -2x, -3x) or such leveraged ETFs as 1.5x (e.g., BDCX). Would someone from Alpaca support clear this up?
More volatile stock with higher margin requirement may not better return than less volatile stock with lower margin requirement. If you are very certain and understand the risk, you can borrow interest-only loan from bank. You only return interest without paying back the principal in a fixed period of time. I am still good without margin, my program can give me 24.9 times combined return in 10 years and 190% return average each year. Sadly the same program and stocks runs on 60% margin requirement can give 10 times more combined return but most brokers only offer very little or none margin on volatile stocks.
FYI. I just asked the R broker. They have 0.8 initial margin and 0.75 maintenance requirement on 3X ETF. You need to pay a $5 fee per month for $2000 margin buying power (i.e. 3%) and 2.5% interest on anything over $1000 using the margin buying power. It’s not cheap but better margin requirements. Remember that using margin is risky because you can lose all your money.
I also support this request. Specifically, I think it would fit in nicely to the Assets API under the [GET] Get an asset call, which currently contains the following info:
{
“id”: “904837e3-3b76-47ec-b432-046db621571b”,
“class”: “us_equity”,
“exchange”: “NASDAQ”,
“symbol”: “AAPL”,
“status”: “active”,
“tradable”: true,
“marginable”: true,
“shortable”: true,
“easy_to_borrow”: true
}
If we could add a dictionary item like the following, that would be great
“margin_requirement” : 0.9
In this case, the 0.9 is a float which means 90%.
Just today I had to contact Alpaca customer service wondering why I received a margin call on a day I was net green. Currently it seems the software allows you to enter into trades beyond what your initial margin can actually support, but then later it detects something is off by checking maintenance margin.
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Still relatively new to Alpaca but wanted to voice my support for this feature request as well. So please consider this “reply” to the thread an up vote of the request!
Thanks
Ed L.
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