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Margin Accounts and Money

Posted: 08 Aug 2017 12:27
by frankrom
Hey Guys,

How do you all feel about margin accounts and using margin money?

Generally speaking borrowing on margin to buy a similar asset that generated the margin room would be a risky idea wouldn't it?

Because if the price drops you lose value on the holdings and also the margin room... it is a double hit... where as buying a completely different asset prevents the double gains and double downs...

Thoughts?

Re: Margin Accounts and Money

Posted: 08 Aug 2017 17:25
by kcowan
I think margin money is handiest for making a purchase before you have more permanent money available. Much better to use a HELOC than margin for both the rate charged and the double hit as you mention.

It is also useful for day trading.

Re: Margin Accounts and Money

Posted: 15 Aug 2017 07:10
by Peculiar_Investor
The OP might want to read our wiki article(s), Margin - finiki, the Canadian financial wiki and Margin account. The Further Reading sections provide links back to previous FWF topics on the matter, thus saving the efforts to search for them.