when you make trades with a margin account, suppose I have 30,000 + margin, do you pay the interest every time you make a trade ? meaning do you sum up all the margin you used for the trades( about 5 in a month) and pay the interest on the total?
How much interest do you pay in a margin account?
You are charged on the average balance borrowed over the month.
For example if you borrowed 30,000 on margin for a single day and none the rest of a 30 day month, you would be charged the interest rate times $1,000. $30,000/30.
If interest was 8% for two days it would be $60,000/30 times the interest or $2,000 (average balance) x .08 = $160
Reply:Is that calculation right?
I think it's something like the following:
$30,000 * 0.08 / 360 = 6.67 per day
6.67 * 1 day = $6.67 per day.
The interest is the annualized value. Let me know if I'm wrong. Report Abuse
Reply:That's right. It usually gets calculated monthly. I always reinvest the dividends back into the loan to offset interest.
name latin
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