Margin trading is a riskier type of investing that is best suited for advanced traders. (Here's a full overview of the differences between cash and margin accounts.) Eligibility: You must be a legal adult (at least 18 years old) and have a Social Security number or a tax ID number (...
On the other hand, with a margin account, your brokerage firm can help you pay for securities by lending you money. So in the case of margin trading, securities in your portfolio will serve as collateral for the loan. Brokerage accounts offer investors a convenient way to buy and sell secu...
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The normal belief is that you need to open a trading account and a Demat account simultaneously. Actually, you can choose to open only one of these accounts. For example, if you want toinvest in an IPO,then Demat account alone is sufficient. Once the shares are allotted to you, the sha...
In options trading, the strike price for a call option indicates the price at which the stock can be bought on or before its expiration. For put options trading, stock price refers to the price at which the seller of the underlying can exercise its right to sell the underlying stocks (on...
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or inter-commodity, with different underlying contracts typically having the same maturity. Sometimes it is possible to trade the spread between contracts on the same underlying trading on different exchanges – this is closer to market arbitrage and does not have the reduced margin benefits of other...
Open a margin account with someone you trust and leverage your assets. TAX-FREE SAVINGS ACCOUNT (TFSA) With tax-free withdrawals, a TFSA is great for any kind of goal. INDIVIDUAL CASH This non-registered account offers flexibility and limitless contributions. Forex & CFDs Speculate on the pric...
Failure to meet the initial margin can result in the prevention of trading or the forced liquidation of other securities by the broker to meet the margin requirement.1 Maintenance Margin Calls A maintenance margin is set after the initial purchase. The Federal Reserve Regulation T sets this requir...
When using margin trading, an investor must ensure that the total value of the margin account does not drop below a certain level. The value of the account, based on market prices, is known as the liquidation margin. Consider a scenario where a trader makes a series of leveraged stock pu...