Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

Questions tagged [margin]

A margin account is an account offered by brokerages that allows investors to borrow money to buy securities. An investor might put down 50% of the value of a purchase and borrow the rest from the broker. The broker charges the investor interest for the right to borrow money and uses the securities as collateral.

A margin account is an account offered by brokerages that allows investors to borrow money to buy securities. An investor might put down 50% of the value of a purchase and borrow the rest from the broker. The broker charges the investor interest for the right to borrow money and uses the securities as collateral.

Source: Investopedia

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Should I invest on margin?

I have an Interactive Brokers margin account, but so far, I haven't been using the margin; I'm considering doing so. According to https://www.interactivebrokers.com/en/index.php?f=18069, their interest rate below $25k (which is the range I'm…
Kurt Peek
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My account's been labeled as "day trader" and I got a big margin call. What should I do? What trades can I place in the blocked period?

HI I recently received a day trading margin call of $14,852.63 requirement. I do not have that much money. What should I do? Should I close my trades and take all cash out? The system labeled me as day trader. I have only $6900 in my money. They…
user2494
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How badly will my credit score be affected if I don't pay back a small margin debt?

I recently started trading stocks and was trading on ameritrade. I went in with just a little money to play around with and try and learn about it, but I forgot to turn off margin trading apparently. I'm now ~$50 in debt and I'm trying to figure out…
Chris
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Other than being able to borrow to invest, how is a margin trading account different from a cash account?

Other than being able to borrow against one's portfolio value to purchase additional investments, how is a typical brokerage margin trading account different from a typical cash trading account? Compared to a cash account, are there any additional…
Chris W. Rea
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How Does A Special Memorandum Account Work

I've noticed that a lot of brokerage firms mention Special Memorandum Accounts (SMA) within the context of calculating margin requirements for margin accounts. Can anybody explain or perhaps direct me to resources for understanding how Special…
Andrew
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Do the proceeds from selling an option immediately convert to buying power in a margin account?

In a cash account, the proceeds from the sale of any security will be held until settlement; for options, this is effectively overnight. One can sell an option on one day, and then use the funds the next day to purchase something else. If I attempt…
AndrewS
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Can (did already) the GME-related hedge funds cover the $5 billion?

Yet another GME question I'm afraid. Straightforward... The GME-related hedge fund(s?) in question lost about $5 billion. Thus, they have to send a cheque for $5 billion† to their broker(s), and/or other wise have to "give someone" five billion…
Fattie
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How does a margin account help with debt consolidation?

I have a trading account with TD Ameritrade and I also upgraded to a margin account. I was reading through their materials and they state that a margin account can help you consolidate debts and move high interest debt to a lower interest. How is…
PropositionJoe
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How does losing money (under margin) work?

I am trying to understand how loss of money works when one uses margin. In the picture below, if price goes into the green area, I make money. If it goes into the red area, I lose money. Suppose I purchase BTC at 10X (ex:$2000 @10X would be…
Casey Harrils
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What is the difference between margin trading and short selling?

In margin trading, you borrow money from a broker to purchase securities. In short selling, you borrow securities to sell them. Still, in both cases, you are borrowing from the broker. Is the only difference between the two the form of the loan…
David Cian
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Is it bad to consolidate and pay off private student loans with margin from my brokerage account?

I have several private student loans that aren't eligible for debt forgiveness and with interest rates between 10-15%, for a total of about $30K. I think it would be easier to pay the loan down over the next 5-10 years or so if the interest rate was…
Michael
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Do you pay interest on trading with unsettled funds in a margin account?

If you buy/sell a stock with 100% of your account (not on margin, but with a margin account) will it just be settled immediately, or do you need to be on margin and pay interest to be able to trade with the unsettled funds?
Hills
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Why are margin maintenance requirements based on total account value and not just the margin debt?

Just reading through Charles Schwab's margin brochure and saw this section... The securities used as collateral must maintain a minimum value relative to the account’s margin debit balance. Schwab’s basic maintenance requirement for equity…
lampShadesDrifter
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Understanding company income statements: What is a good profit margin that would make it worthwhile to invest?

I have been learning about how to read and understand a stock company's income statement and using those variables to determine the worth of the stock. My question is, what is a good profit margin for a company that would make it worthwhile to…
Michael
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Investing using leverage

As a trader, I understand the premise of Leverage and Margined accounts. I understand that it is almost necessary to use leverage in order to make money from trading. But the question is about Investing and not so much trading. Trading can…
PMP
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