Currently I am trading a cash account but would like to change to a margin account as I trade frequently and settled funds don't settle fast enough. I have a question about Stock Broker Margin Account Interest rate calculations. Say the rate is 5%. I use $10,000 on margin for a trade that lasts 30 min. How does the broker calculate the interest charged for this particular trade? Would it be $500 per year / $1.37 per Day / .06 per Hour / .03 per 30 min? Is that right or do brokers calculate this differently. Thanks for the help! Mike
Margin is always quoted in APR, and AFAIK it is only done daily. There are plenty of APR calculators out there that can tell you what you would pay per day on a given loan. For 30 minute trades, interest should be the least of your concerns.
Margin interest is only charged for overnight holds. If your broker charges interest for day trades you are getting scammed.
Thanks cruisecontrol. I can't find anything at my broker that says anything about how the rates are applied, only that they are. That makes sense that only overnight holds would be charged.
if I have 1 million cash, bought one million stocks long,and shorted 1 million stock short. So the margin is charged on 1 million due to the short position?
i know I will pay short stock interest fee. I do not know if I also have to pay the 1 million margin fee?
Go back to the basics if you ask this question. Then you will come up with an answer on your own. It will improve your trading.