I am looking to get into margin trading on IB.
As an example to start with:
I think of buying 10k of stock XYZ and using 5k of my own cash + 5k from IB.
Now my question:
How does this actually work?
Can I simply have 5k in cash and the buy 100 stocks of XYZ at 100 USD stock price (total 10k)?
Or would it also work to buy 100 additional shares of XYZ to 100 shares of XYZ that I already have in my portfolio?
Will the margin that I can have be calculated on my current portfolio s net liquidation value or on the cash I hold at the moment I want to establish the position with the loan?
I saw there are 2 models on IB:
risk based and rule based.
I guess for standard margin trading the rule based system applies?
And where can I see if I have an account that allows margin trading or not?
Any advice would be appreciated.