I just opened an acct with Zecco. I also opted for margin acct. My question is if you never actually use the?

Question

margin $$$ is you account charged the interest rate on your own money that you put into the account. So if I put $4000 in would I get charged the 7.2% on my $4000???

Answer 1

No.

Answer 2

You should only get charged interest for the amount of margin you actually use, while it is being used for an equity, option, etc.  When you place an order, you have to pay attention to whether it is a cash or margin order.  Margin could allow you to make (or more importantly, lose) more than using cash.

So you should have a plan and consistanly make more than you lose with cash before using margin.

Answer 3

No, you won't pay a margin fee until you use "margin".

Warning:  You're on the road to making a typical new investor mistake..........

You've opened a brokerage account with little working knowledge of trading/investing. This can be a costly mistake. If you want to save yourself some heartache, take 6 months to a year and read about investing. I wish I had. I'm doing well now.... but I lost a lot of cash my first two years. I was buying stock because;

A friend told me of a stock that couldn't lose!

I heard it on TV or Radio!

I had a "gut" feel !

How much further could it go down?

All it does is go up!

I used the product and thought it was great.

etc. (all horrible reasons to buy a stock).

Zecco was rated the poorest of brokers by Barron's this year.

Wouldn't it have been better to go with a broker that charges more and provides service?

Any way..... good luck!

Answer 4

You will be charged interest only on a debit balance,  in your case you have a credit balance.

B/D charge interest on debits but will pay interest on credit balances.  Check with the firm for their policy, they may want you to move the money to a money market, but so what, when you buy the money is journald over.

Some of those that replied to your question are not using the proper industry accepted definitions,  MARGIN is another name for equity, not the debit (or the amount borrowed).  

So when you have "margin" account and they talk about your "margin" this is meant to be your equity not your debit - they are different and distinct