Can I avoid margin by trading available cash only?

Alpaca Trading
1

Is it possible to trade only on the cash balance of the account to avoid using margin? Basically have the trading bot check available cash to make sure it has enough cash to place orders etc…

cash

Cash balance in the account

Type:

    Optional[str]

Thanks

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yes also to note i think the rule of thumb is to not hold over weekend / night to prevent margin calls and not to go over 1/2-1/3 balance

just some notes

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Ahh crap yeah forgot about margin maintenance. Well, that’s the nail in the head for me. Call me when Alpaca supports cash accounts. With T+1 in effect there is no longer a reason to require margin.

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@tactitrader If you are not selling short then one can simply look at account.cash. As long as that is positive you aren’t borrowing on margin. If it’s negative, that is the amount borrowed. An issue with that approach however is it doesn’t include any open orders. The best approach if you do not want to use margin and do not want to sell short is to simply set the max_margin_multiplier to one. You can do this in the dashboard as shown below.

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A couple of things to consider, if you never use margin then you never need to worry about margin calls or maintenance margin. You can hold as much as you wish overnight and the weekends. With a margin account, even if the margin is set to 1, there’s what’s referred to as ‘limited margin’. This means you can immediately trade on unsettled funds. One can, for example sell $1000 of SPY and then immediately buy $1000 of NVDA. If one had a ‘cash’ account, one would need to wait until the following day to buy NVDA. That is probably the biggest reason to want a margin account, even if not using margin, rather than a cash account.

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