Discussion in 'Stock Market Education' started by crimsonghost747, Apr 14, 2015.

  1. crimsonghost747

    crimsonghost747 Senior Investor

    Mar 2014
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    Well I put this under "stock market education" since I couldn't figure out a better one. But it's not really a question about what and how to use leverage etc. I got that covered.

    What I would like to know is how often and in what situations do you guys like to leverage your portfolio? And how much? How do you pay it off?
    Basically just looking for your own ideas of how leverage works the best for you.

    Personally I'm currently at 0% leverage. All day trades are made mostly with the margin provided by my broker but those positions always get closed on the same day so no worries there. For my longer term portfolio I would love to use leverage similar to 1-2 years of dividend income, so roughly 5-10%. I just feel that with the current valuations it would be too risky so for the moment I haven't done it.
  2. greet

    greet Member

    Apr 2015
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    I dnt think so u shld actually use Levarage or margins either in long term or short term. They r killers for yur accounts. Whatever money u got. Try to get perfection in trading or investing with that. Rest when u will get consistent discipline in yur trading or investing. Then arrange big capital and enjoy yur lfe in this business but tkng levarge or margins is not the way to lve in stock markets.
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

    Feb 2014
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    I use no more than 140-160% at the most in my main taxable account. That means my equity plus an additional 40-60%. 60% is unusual.

    And above 100% is usually reserved for shorts, put options, etc. I'm rarely even long stocks up to 100%. I also keep a bit of commodities exposure via ETFs, etc.

    I have on occasion been in heavy cash with a good chunk of my 100%.

    I see some younger people with minimal amounts of money talking about using 700-800% in their overseas brokerage accounts and I cringe. Some of the big investment banks that got burned in '08 were as much as $30-32 to $1 on leverage - like 3000%. It worked great when they were right, not so great when they were wrong.

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