Margin accounts allow you to borrow a percentage of the money needed for your investing activities. Because of the inherent risk with leverage, and daily interest involved, they’re typically used by more advanced traders.
Features & benefits
A margin account allows you to leverage your buying power for stocks, mutual funds, bonds and other securities on North American markets. Options trading feature (Calls and Puts) is also available when applying for a margin account.
There’s no fee to open a margin account, and your account can be held in joint ownership or by a corporation or investment club. You’re also able to have others trade on your behalf, as long as you’ve given them trading authority.
For most stocks and mutual funds, you can borrow up to 50% of the cost of the securities you buy, provided that the stock or unit price is more than $2. For most option eligible stocks, you can borrow up to 70% of the market value.
You may usually borrow up to $250,000 on any one security, subject to our review. Larger margin loans are available with some restrictions.
Interest rates are charged at the prime rate, plus 2%.
Managing your margin account
You can’t buy on margin when the stock price you’re interested in is less than $1.50 per share. You also can’t borrow more than $250,000 without our prior approval.
Please maintain at least $2,000 of equity value in your margin account (Equity value is market value of your holdings plus cash).
Sorry, you can’t buy on margin in your registered account (e.g. TFSA, RRSP or RRIF), and we can’t allow you to make additional investments while a margin call is in effect.