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| How does a margin account work? |
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Margin is the idea of buying securities on credit. This credit is calculated by the amount of equity within your account. When you engage in day trading you will use your equity coupled with margin to maximize your buying power. Your daily buying power is based on the previous business day's closing position values. For example, margin equity and closing position values for Monday the 1st will be used to calculate the buying power available for use on Tuesday the 2nd. In order to trade using margin, you must familiarize yourself with the margin rules and the "calls" they can create. To help our traders better understand these terms, we have provided a worksheet that thoroughly explains these concepts.
Please download the worksheet here.
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