Friday, February 27th, 2015

What is the difference between a margin and cash account for stock trading?

I’m using E-Trade? Cu? Is the difference (as a whole if? You wish) between a trading account in cash and a margin account trading?

Comments

5 Responses to “What is the difference between a margin and cash account for stock trading?”
  1. pagodaboy2001 says:

    Margin trading is when you borrow money (from a broker) to buy stock, the investment (stock) is held as collateral.

  2. brianpadley says:

    I believe trading on margin is borrowing money to trade. Trading on cash is using money that you invested in your account.

  3. betotron don says:

    margiin= buy with 50% of selling price as example
    cash acct=buy with 100% of selling price as example
    that be the difference

  4. mizzykizzy says:

    A cash account is where you pay for the Stocks with 100% cash.

    A margin account is where you only put up a percentage of the purchase price of the stock (say 30%), if the stock goes down in price, you will have a “margin call” where you have to put more cash in to keep the leverage at 30%. It’s basically a way to try and make an investment without putting up all the cash, like buying a house with 20% down…

  5. Mark S says:

    The first two answers were correct, but one other difference is that with a cash account you have to keep in mind the settlement date. In a cash account you must wait three days after the sale of a stock before the money from that sale is available to make further purchases. In a margin account the money is available immediately after the sale.

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