What does buying stock on the margin mean
It can be further broken down into Initial Margin Requirement and Maintenance Margin Requirement.
An Initial Margin Requirement refers to the percentage of equity required when an investor opens a position. This is called the Maintenance Margin Requirement. When the investor is unable to maintain the equity above the maintenance margin requirement, a margin call occurs.
What Does Buying Stock on Margin Mean? - Budgeting Money
Certain securities have higher margin requirements, in which case the initial and maintenance requirements will be the same higher rate. Please refer to the Special Margin Requirement chart to learn the details. Want to speak with someone regarding basic questions in real-time? Try our interactive live chat service. One of our representatives can provide assistance with your inquiries. Getting Started Cash vs.
Stay the same as the Initial Requirement.
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What Does Buying Stock on Margin Mean? - Budgeting Money
Brokerage Products and Services offered by Firstrade Securities, Inc. Online trading has inherent risk due to system response and access times that may vary due to market conditions, system performance, and other factors. An investor should understand these and additional risks before trading. Carefully consider the investment objectives, risks, charges and expenses before investing.
All investments involve risk and losses may exceed the principal invested. Past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Firstrade is a discount broker that provides self-directed investors with brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice.
Rules for Buying on Margin
Options trading involves risk and is not suitable for all investors. Options trading privileges are subject to Firstrade review and approval. Please review the Characteristics and Risks of Standardized Options brochure before you begin trading options. Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing.
Leveraged and Inverse ETFs may not be suitable for long-term investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.
A mutual fund or ETF prospectus contains this and other information and can be obtained by emailing service firstrade. Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market.
The Margin Disclosure Statement and Agreement PDF is available for download, and contains information on our lending policies, interest charges, and the risks associated with margin accounts. See our Pricing page for detailed pricing of all security types offered at Firstrade.
All prices listed are subject to change without notice.
Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security. This is not an offer or solicitation in any jurisdiction where Firstrade is not authorized to conduct securities transaction. System response and access times may vary due to market conditions, system performance, and other factors.