LogFAQs > #951025321

CoolCly posted...

Putting extra money you have on hand into the stock market during a decline isn't a bad idea because it's a good time to get some discounts, but being *required* to do it for a margin call at a time when might need that cash for something else is dangerous. The cash flow is going the wrong way!

I mean the idea is you put the money in and don't invest it in that dire time. You withdraw that money when the market recovers and you've sold some of your assets which have bounced back to cover. You're using your emergency money for just that, an emergency.

Realistically though if you're using only 10% margin I'm skeptical even something like last March would crush you. I don't know the exact numbers but keep in mind those numbers Red Sox posted were based off of 50% margin use, not 10%. I'm pretty sure the % loss for infinity% is much much higher when you're at 10%. I've lost 20% portfolio value in one day with 10% margin use and all I got was a warning. No margin call. I've never received an actual margin call yet. I have clarified the details which is why I know they often literally call you to resolve it but yeah.

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No problem!
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