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HOW IS
SUB-CONTRACTOR LEVERAGE CALCULATED? |
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Sub-contractor leverage is calculated by multiplying
the trader's base equity by their leverage
multiplier. During the account setup process,
traders receive a "leverage multiplier" number
between 10 and 20, which determines how much a
client may receive for intraday and overnight buying
power. All sub-contractor accounts receive a
minimum amount of buying power equivalent to 10:1
for intraday trading and 4:1 for overnight trading.
Please review our
Leverage Calculation Examples
for more information. |
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WHAT
DETERMINES THE AMOUNT OF LEVERAGE I AM ABLE TO
RECEIVE FOR TRADING? |
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WTC
evaluates various criteria pertaining to your
trading account to determine your initial "leverage
multiplier". This includes:
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Initial capital deposit amount
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Trading style
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Overnight trading requirements
- Risk
management techniques
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Percentage of position allocation
All
sub-contractor accounts receive a minimum leverage
multiplier of 10:1 intraday and 4:1 overnight. |
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HOW DO I INCREASE THE LEVERAGE ON MY ACCOUNT? |
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Typically,
following an initial 2-week evaluation period,
clients can request an increase up to 20:1 intraday
and 6:1 overnight for trading of marginable
securities by contacting their designated WTC client
representative.
Increases
in leverage are reviewed by our affiliate private
capital group's risk managers and if approved, take
effect immediately. |
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DO ALL
CLIENTS RECEIVE THE SAME AMOUNT OF LEVERAGE? |
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NO.
Based on various factors, WTC will assign an initial
"leverage multiplier" to the account which
determines the amount of leverage a client will
receive. Most traders will receive a base of
10:1 intraday and 4:1 overnight buying power during
the first two weeks of live trading. However,
upon request, a trader may begin with as high as
20:1 intraday and 6:1 overnight equivalent buying
power. |
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AM I
REQUIRED TO MAINTAIN ANY MINIMUM ACCOUNT BALANCES TO
ACCESS LEVERAGE? |
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Unlike
standard "pattern day trading" accounts, which
require a minimum balance of $25,000 to access
intraday margin, sub-contractor accounts draw on
leverage from a master account, which maintains a
high enough balance to constantly qualify for
intraday leverage.
As a
result of this account arrangement, sub-contractor
accounts are only required to maintain a minimum
equity balance of $2,000 to access supplemental
leverage. |
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HOW MUCH BUYING POWER DO I RECEIVE FOR INTRADAY AND
OVERNIGHT TRADING? |
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Sub-contractor
accounts receive between 10:1 and 20:1 equivalent buying
power for all intraday trading activity and between 4:1
and 6:1 equivalent buying power for all overnight trading
activity.
Please review our Using Supplemental
Leverage page for additional information and examples.
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DOES MY ACCOUNT LEVERAGE APPLY TO ALL STOCKS OR ONLY
MARGINABLE STOCKS? |
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Standard 10:1
intraday and 4:1 sub-contractor leverage applies to
marginable stocks. However, clients may trade non-marginable
stocks with an equivalent of 4:1 intraday and 2:1
overnight buying power. |
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DOES MY SUB-CONTRACTOR ACCOUNT LEVERAGE APPLY TO OPTIONS? |
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Sub-contractor
leverage does not apply to options trading. Clients
may trade options on a 1:1 basis. |
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HOW MUCH DO THE CAPITAL FIRMS CHARGE FOR LEVERAGE? |
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Monthly capital fees
are based on a monthly rate of 1% to 1.5% of supplemental firm
equity. All capital fees are debited from sub-contractor
accounts within 5 business days by the affiliate private
capital groups.
*Please refer to the following schedule to determine monthly
leverage fees: |
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Trader Equity Deposit |
Monthly Leverage Fees |
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$5,000 - $10,000 |
$150 to
$225 |
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$10,000 - $15,000 |
$225 to
$337 |
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$15,000 - $20,000 |
$337 to
$450 |
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$20,000 - $25,000 |
$450 to
$563 |
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$25,000 - $50,000 |
$563 to
$1125 |
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$50,000 + |
Negotiable |
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*Pre-set leverage
rates are based on standard twenty-five margin requirements
for all intraday trading of marginable equities on the NYSE,
NASDAQ, and AMEX exchanges. Additional charges may apply
for increases in trader multipliers. |
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AM I
RESPONSIBLE FOR ANY LOSSES THAT EXCEED MY EQUITY
BALANCE? |
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NO.
Our affiliate private capital firms utilize
sophisticated risk management technology to monitor
all trading activity for sub-contractor accounts.
These programs provide our dedicated risk management
team with the capability to implement
"auto-liquidation" on an account which closes out
all positions prior to the market close should an
account fall to a balance of $2,000 or lower.
Additionally, overnight positions are limited to 4:1
leverage and reviewed according to issue liquidity
and account allocation percentages. Traders
are responsible only for the equity or risk capital
they provide for their sub-contractor accounts and
should an account go into the red, our affiliate
capital groups assume responsibility.
Prior
to live trading, clients are required to complete a
full Risk Profile form and provide contact details
including an Instant Messaging ID.
Click here for more details on opening a
sub-contractor account or contact a client
representative at 1.866.473.5069. |
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HAVE MORE
QUESTIONS OR NEED ADDITIONAL HELP? |
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Feel free to
contact a WTC representative seven days a week for
assistance. |
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Call us
toll-free at 1-866-473-5069
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E-mail us
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Send a fax to
1-866-611-0913
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Chat with a
representative via Live Support.
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