I was denied a margin account for being unemployed, what should I do?

Question

I'm in Canada, and encountered something very strange in the last few months: my mother and I each opened an individual (not joint) discount brokerage account at HSBC InvestDirect. We both deposited $100 000 into our respective accounts, and both claim to have limited experience trading options (she never traded options and I've been doing it occasionally for a year). My mother's credit history is limited and so maybe has an incomplete credit file (she has been using a credit card for 5 months and always paid the balance in full the day the statement came out. She is employed full-time at a minimum wage job and I'm unemployed and have an Equifax score of 730-ish with $0 of debt. I was given a cash account, which means I'm not permitted to trade any options (including covered calls or long calls/puts, and I don't understand why these trades need margin) while she was given a margin account with short selling/options trading enabled. The people at the bank refused to acknowledge the fact that I'm denied a margin account because I'm unemployed, just saying that it was not approved.

Question is, what should I do? I'm pretty much never going to get a job, but will it increase my chances if I somehow manage to turn a huge profit in my cash account? The people at the bank said I could reapply for options trading after 6 months......

kmiklas · Answer

Put more money into the account. You have to demonstrate that you have the cash to back your bets.
If you don't have the money, and you're unemployed, then what are you doing messing around with a margin account?
The only case where the broker might extend this to you is if you had demonstrated success as a trader; such as a 10% profit for the last 5 years, and for some reason lost all your cash through no fault of your own, and need some seed money. But, in reality, a skilled and successful trader probably wouldn't have that problem.
Would YOU lend money to a trader with questionable skill, that has neither liquid cash, nor a revenue source, for the purpose of betting in the market? That is, as they say, a "high risk" investment.
EDIT: That being said, perhaps try a different broker, and/or apply again.
Also, is this a personal account? If you are planning on trading with your Mother's money, that could be a red flag.

Bob Baerker · Answer

This is a US centric answer so I don't know how applicable it is for Canada:
It makes no sense that your mother, with little to no sense,  was given a margin account with short selling/options trading enabled.
It makes no sense that if you deposited $100k that they denied you level I option approval  for cash secured short puts and covered calls in a cash account.
That may be bank policy but to me it's two nonsensical extremes.

I was denied a margin account for being unemployed, what should I do?

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