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  • Just a question from a baby ape

     Sensidude updated 1 year, 2 months ago 4 Members · 5 Posts
  • Sensidude

    July 6, 2021 at 1:11 pm

    Can annyone tell me if it is better to just buy shares, or to buy them with a leverage?
    </div><div>From what i understand you are buying a possition and down actually own the stock. The upside is with a leverage from 1:5 i can own a lot more positions. I’m new to investing and hope some smart ape can explain, instead of brokerage firm telling me what is best.</div>

  • robodrill

    July 6, 2021 at 1:18 pm

    The more shares you own the better, PROVIDED you can maintain your position indefinitely.

    I would never borrow money to invest. I cannot take the loss.

    I invest what I already count as gone forever. Nothing in my life depends on AMC. I have all upside and no downside. That is the position to be in. It costs me nothing to hold.

    If one puts oneself into the position of needing to relinquish shares, then one poorly serves the cause or oneself. On the other hand, when one buys and holds one serves the cause and oneself.

  • CrayonMuncher

    July 6, 2021 at 2:19 pm

    You’re still buying and owning shares with or without leverage but the difference is whether or not you’re tapping into the leverage your broker is giving you.

    When buying with leverage, think of it as a loan your broker gives you. For example, if you have $10 in your account and they give you 5x, you now have $50 worth of buying power instead of just your own $10. That doesn’t mean you have to use all $50 worth of your buying power, but you do have it available to you.

    When you sell the security you bought using your leverage, you pay that back using a portion of your proceeds.

    If you are on a straight cash account with no leverage (or margin with 1:1), then none of this applies. You would only have the buying power of whatever dollar amount of settled cash is in your account, so in the previous example, it would be $10.

  • CLAYnation

    July 6, 2021 at 6:55 pm

    There were some apes out there reporting that margin accounts were being liquefied without their approval. I personally switched back to a cash account. We know there will be fuckery with the brokers. I do not want to give them the chance to margin call me even though I never used margin.

  • Sensidude

    July 7, 2021 at 6:54 am

    Thanks for replying.

    I can hodl to the end of time i would never sell at a loss. Thanks for the the explanation.

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