Benefits of Margin

Margin lending acts as your flexible line of credit, secured against existing investments and is generally more cost-effective than many other consumer lending options. If you are considering the use of margin, you must fully understand the risks associated with using a margin account.

Margin allows you to use the securities in your brokerage account as collateral to borrow funds quickly, at favorable low margin rates, without having to liquidate within your portfolio.[1] You can utilize your collateral as leverage to make additional investments in securities, sell securities short or access a convenient line of credit to raise cash for other purposes. Margin is not available for all account types such as IRAs and custodial accounts.

Other benefits of margin:

Convenient

Only an Investrade brokerage account and a completed margin agreement are required. In order to use margin, you must also maintain at least $2,000 in equity in your account. You may request access to margin for your existing brokerage account or when applying for a new account.

Flexible

There is no set payment schedule as long as you maintain the required equity maintenance amount in your account. The interest on the loan, based on the average daily debit balance in your account, is added to your margin balance monthly.

Accessible

By setting up a margin account, you have no obligation to borrow. Margin borrowing is accessible at your convenience once your margin account is approved. If borrowing for short-term cash purposes, in most cases you can receive funds the following business day after your initial request.

[1] If the securities in your account decline in value, so does the value of the collateral supporting your loan, which could result in a margin call and/or selling securities in your account(s). It is important that you fully understand the risks involved in trading securities on margin. Click here for the risks involved with trading securities in a margin account.