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Learn the basics of using margin
How margin works
Margin allows you to borrow against the securities in your
portfolio. You can tap into your margin cash available on Schwab’s
brokerage account with the margin feature by placing a trade or
withdrawing cash. Interest on your balance accrues daily and is
posted monthly. With Schwab’s tiered
interest rate schedule, the higher your margin balance, the
lower your rate.
The amount you can borrow depends upon the type and value of
securities in your account. As long as you keep sufficient
collateral in your account, your loan can remain outstanding until
you choose to pay it down. If your account value drops below the
requirement, you will need to deposit additional cash or marginable
securities.
Know how much can you can borrow
To begin borrowing at Schwab, you must have at least $5,000 in
cash or marginable securities in your account. Once you have
satisfied that requirement, the amount of money you can borrow on
margin toward the purchase of securities is typically limited to 50
percent of the value of marginable securities in your account.
Understanding your buying power and cash available can get
complicated, so Schwab calculates your buying power for you. This
information is provided for clients with their Schwab brokerage
account. Your buying power may fluctuate with the value of your
securities throughout the day.
Securities that are marginable at Schwab
- Most stocks traded on major U.S. exchanges priced above $3 per
share
- Most Nasdaq-listed securities priced above $3 per share
- Most mutual funds, provided they've been held for at least 30
days (cannot purchase mutual funds on margin but can be used as
collateral)
- Most corporate, treasury, municipal, and government agency
bonds
Please note that some assets are not available as collateral for
margin borrowing, including money market funds, certificates of
deposit (CDs), annuities, and options.
Clients can use a margin look-up tool to confirm the eligibility of
the equity securities in their account. You can also confirm
eligibility by contacting a Schwab representative at 866-713-8384.
Maintenance requirements
Schwab’s minimum maintenance requirement on most marginable
securities is 30 percent. Schwab may impose higher margin
requirements on certain securities or accounts. This may be
appropriate for some volatile or thinly traded securities or on
concentrated accounts.
Maintenance Calls
If the account equity falls below the required amount, Schwab
issues a maintenance call requiring you to deposit enough cash or
collateral to increase your equity above the requirement. Margin
maintenance calls are due immediately.
Ways to meet a Maintenance Call*
- Depositing funds: wire, check (deliver to a branch) or
MoneyLink
- Liquidating securities
- Journaling cash/securities from other Schwab accounts
- Depositing marginable stock
* Please note that margin maintenance calls are due immediately. See
Margin Risks for further details.
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