Question about Margin

[butterfacetrader]

I was looking at TD Ameritrade margin interest rate and it says 7.25% is the base and an extra 0.5% for the amount I plan to invest. so that would be 8.25%

Do they expect you to pay 8.25% on the amount that you borrowed? As in if your investment grew 10% you would only receive 1.75% of the extra profit?

Interactive Brokers says their rate is 1.58% for margin interest. Does that sound right?

If anyone knows about margin leverage and could clarify this for me I would appreciate it.

I'm thinking about investing some money and willing to accept the extra risk of leverage but am unclear about the percentage of interest charged.

I feel sorry for you, because so often I find ET posters can't read, or have poor awareness of whats going on. The result is you don't get your reply, and you get a bunch of nonesense.

All rates displayed are annual APR rates. They are also tiered marginal rates, so the more you marginally borrow according to the rate table, often the less you pay for that marginal amount.

You did not read wrong. One broker charges much higher rates than another. Just like how that same broker may charge much higher commissions than the other. Different brokers, different adv/disadv and you choose one that you like.

Reasons behind why rates are so different are irrelevant other than that just being the case and it will definitely affect your bottom line if you are constantly borrowing margin money.

 

[Commodity_Trader]

Google will not tell you everything. Providing 50% of CME margin for daytrading futures is quite common. I have heard of some offering 25%. You will have to call and ask. FCMs prefer day traders because in addition to lower risk, they don't have to put up their own capital. When you trade with over night positions, they have to put up 8% of your SPAN margin out of their capital, for risk.

for example a broker like AMP offers a CL / GC with 1000 $ intraday margin,i meant is there any broker that represents leverage like 1:100 same as FX market ?a 5k deposit in some highly leverged FX accounts have buying power of 500k .

 

[1245]

for example a broker like AMP offers a CL / GC with 1000 $ intraday margin,i meant is there any broker that represents leverage like 1:100 same as FX market ?a 5k deposit in some highly leverged FX accounts have buying power of 500k .

I hope not. FX in the USA max is 50:1 and I feel that is too much. No, no FCM will allow that.