Interest on Intra Day Margin/Buying Power

Q

qll

I wonder if the firm charges you Interest on Intra Day margin/buying power?

I think in bank world, there is no Intra day interest. So you can borrow from morning then pay back in afternoon.

example 1, i have 10k in bank of america with over draft protetion of 10k, i wrote a check of 15k. the money is out on friday morning, then i go to back to deposit a 5k cash on friday afternoon. there is no interest on the 5k i borrowed for half day.

However, if there is no interest, why on earth somebody will lend you Interest free money? well they must keep a capital pool for long time which cost them interest, unless their capital pool is also intra day only from somebody else, - like the pro trading firm borrow from banks at 8am then pay back at 5pm.
 
Quote from qll:

I wonder if the firm charges you Interest on Intra Day margin/buying power?

I think in bank world, there is no Intra day interest. So you can borrow from morning then pay back in afternoon.

example 1, i have 10k in bank of america with over draft protetion of 10k, i wrote a check of 15k. the money is out on friday morning, then i go to back to deposit a 5k cash on friday afternoon. there is no interest on the 5k i borrowed for half day.

However, if there is no interest, why on earth somebody will lend you Interest free money? well they must keep a capital pool for long time which cost them interest, unless their capital pool is also intra day only from somebody else, - like the pro trading firm borrow from banks at 8am then pay back at 5pm.
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I think some banks do charge their clients arrangement fee and annual fee for setting up an overdraft a/c, do you have to pay such fees?
 
Quote from jessechan:

I think some banks do charge their clients arrangement fee and annual fee for setting up an overdraft a/c, do you have to pay such fees?
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no. never heard of overdraft fee. there is an overdraft interest which is like prime+1 to prime+10, if balance is carried overnight
 
Quote from qll:

I wonder if the firm charges you Interest on Intra Day margin/buying power?

I think in bank world, there is no Intra day interest. So you can borrow from morning then pay back in afternoon.

example 1, i have 10k in bank of america with over draft protetion of 10k, i wrote a check of 15k. the money is out on friday morning, then i go to back to deposit a 5k cash on friday afternoon. there is no interest on the 5k i borrowed for half day.

However, if there is no interest, why on earth somebody will lend you Interest free money? well they must keep a capital pool for long time which cost them interest, unless their capital pool is also intra day only from somebody else, - like the pro trading firm borrow from banks at 8am then pay back at 5pm.
More...

We charge nothing for intraday use of capital, why would we? There is no charge unless you keep things overnight. The capital usage is based on settlement, and if you settle your long and short the same day, then a none event.

Don
 
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