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If the cash balance is positive, the money is available to the account holder to reinvest, or may be withdrawn by the holder or left in the account and may earn interest. In terms of futures and cleared derivatives, the margin balance would refer to the total value of collateral pledged to the CCP ( central counterparty clearing ) and or ...
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In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of the funds necessary to buy the instrument. [ 1 ] [ 2 ] If long, the cost of carry is the cost of interest paid on a margin account.
If you were to invest $10,000 in a good stock and get a 20 percent return, you’d make $2,000. But what if you could have borrowed another $10,000 to buy more stock and doubled your profits ...
Special memorandum account (SMA) [1] is a margin credit account used for calculating US Regulation T requirements on brokerage accounts. In addition to Initial Margin and Maintenance Margin requirements, the SMA ledger is used to lock in unrealized gains that augment the client's buying power.
If you want access to the best stocks in the market, then having a brokerage account is an absolute must. But compared to opening a bank account, the process for setting up a brokerage account can ...
This interest is calculated as the sum of a fixed margin and a floating base rate; for instance, with a 2.0% margin and a 3.5% base rate, the effective rate becomes 5.5%, resulting in annual interest costs of approximately $22,000 on the $400,000 drawn.
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