April 7th, 2010 | 
Author: 
yeaaa asked:
Right now i have a normal money market account on E-Trade and i have to wait 3 days for my money to come back so I was thinking of getting a margin account. This is what it says for the rate “6.99% (3.00% above base rate)” Can someone explain this to me?
I usually buy about 20,000 worth of a stock at a time
And does the margin get repaid when the money from the last trade becomes settled?
online trading video
Right now i have a normal money market account on E-Trade and i have to wait 3 days for my money to come back so I was thinking of getting a margin account. This is what it says for the rate “6.99% (3.00% above base rate)” Can someone explain this to me?
I usually buy about 20,000 worth of a stock at a time
And does the margin get repaid when the money from the last trade becomes settled?
online trading video
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trading margin
You will only dip into margin when your purchases exceed your cash balance. In a margin account, as long as the money is “there” (but not settled) you can use it again right away. Its not really a loan, since the next purchase also will not settle for three days. By the time the broker needs to lay out the money, it will be there.
free trading margin reports
margin is an incredibly unsuitable tool for the novice investor.
stay away from it at all costs, until you better educate yourself. and even then, it’s not a terribly great idea (though it would allow you to do some more interesting things, like selling short, and using options more freely).
free trading margin reports
That is a very high rate. Shop around, you should get something much closer to “broker’s call” money rate, 25 basis points BELOW prime, compounded monthly. Any margin debt you owe will be erased dollar-for-dollar on settlement any sales within your account.
EX: your stocks = 200,000. You owe 7,500 margin debt. You sell 20,000 in stock. Your account would be 180,000 stock, 12,500 cash, 0 debt. Net 192,500 equity.