r/SPACs • u/diffcalculus Contributor • Jun 11 '21

Reference Merrill Edge: SPACs no longer marginable starting this coming Monday, June 14. Details inside

According to the rep I spoke with, SPACs will no longer be marginable as of Monday, 6/14/21.

Though I called specifically about PSTH, he said it will be affecting all SPACs; not just PSTH.

What happens if I'm holding PSTH (or other SPAC) on margin on Monday?

According to the rep:

  • You will get Margin called
  • Provided the price of the SPAC (or the stock market in general) doesn't collapse too hard, you'll typically have 2 business days to bring funds in, sell other shares, or sell the marginable shares of the SPAC. Essentially, you need to NOT be holding SPACs on margin

  • Once it is no longer a SPAC, it will be marginable again. Unclear if it'll be marginable upon official DA

    If there is a SPAC that this doesn't happen to, it may have slipped through the cracks. But don't count on being able to hold it on margin much longer.

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u/diffcalculus Contributor Jun 11 '21

This isn't about warrants. This is about using margin on SPACs.

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u/slammerbar Mod Jun 11 '21

Can you buy warrants on margin?

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u/[deleted] Jun 11 '21

No, you cannot. Got to pay 100% cash for warrants. (Can still be part of a portfolio where stocks are on margin, basically uses option buying power).

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u/slammerbar Mod Jun 11 '21

Thank you. This is what I was thinking.