I'm starting to understand margin accounts and how interest is charged but I need something clarified. Say I deposit $10,000 cash into a margin account and now have $20,000 buying power. Is interest charged on half of the cost of my stock purchase or only amounts in stock exceeding the first 10,000?
I ask because this source says that "if you have $5,000 cash in a margin-approved brokerage account, you could buy up to $10,000 worth of marginable stock—you would pay 50% of the purchase price and your brokerage firm would front the other 50%."
So if I buy 15,000 in stocks, is the borrowed amount on which interest is charged then $5000 or $7500?
Submitted June 05, 2017 at 11:51PM by lowsparrow http://ift.tt/2syluHZ
