I am very new to day trading and have been trying to study all the lingo related to the broker accounts, rules and strategies related to day trading. I did have one particular question and that is related to interest rates on margin accounts. Let me ask my question with the help of an example, let say i have $2,500 in my account with a leverage of 6:1. This means i have a buying power of $15,000. Now $15,000 - $2,500 = $12,500, is the amount of money i owe to the broker for the buying power. My question is, does the interest rate kick in for $12,500 amount? If not then how does it work?
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Noob question regarding Margin Interest on Overnight/Swing Trades
in Swing Trading
Posted
Hello,
I am very new to day trading and have been trying to study all the lingo related to the broker accounts, rules and strategies related to day trading. I did have one particular question and that is related to interest rates on margin accounts. Let me ask my question with the help of an example, let say i have $2,500 in my account with a leverage of 6:1. This means i have a buying power of $15,000. Now $15,000 - $2,500 = $12,500, is the amount of money i owe to the broker for the buying power. My question is, does the interest rate kick in for $12,500 amount? If not then how does it work?