Margin Infographic

What is margin trading?

Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment.

vs.

Securities
Margin

Commodities
Margin

There are two margin definitions. Securities margin is borrowing money to buy stock.

However, when you invest in commodities, trading on margin involves putting in your own cash as collateral for the contract.

Trading Securities on Margin

Trading securities on margin is most commonly understood as borrowing money from a broker to buy stock.

Securities Margin Requirements

Initial Margin:

How much cash you must deposit to buy securities on margin.

Maintenance Margin:

How much equity you must keep in your margin account.

Example profit / loss on stock trade using margin: Bought 100 shares @ $40 ( 50 shares with cash and 50 shares on margin)

Borrowed Funds
Your Cash

Federal Reserve Regulation T Initial Margin requirement is at least

50%

Maintenance Margin requirement is at least

25%

IBKR Margin Account Types

REGULATION T MARGIN

PORTFOLIO MARGIN

Rules based margin requirements are created from a defined formula and governed by Regulation T, FINRA Rule 4210, and IBKR house requirements.

Risk based margin requirements are assessed by profiling the risk of the positions in your account in accordance with OCC requirements. For advanced traders only.

Real-Time Activity Monitoring

Monitor Balances

View your margin balances and requirements in the TWS Account Window in real-time.

Preview Margin Impact

Shows your projected margin balances before entering an order.

Margin Alerts

Receive warnings and set alerts that tell you when your margin requirements are at risk.

Margin Trading Overview

Interactive Brokers Canada Inc. is a member of the Canadian Investment Regulatory Organization (CIRO) and Member - Canadian Investor Protection Fund. Know Your Advisor: View the CIRO AdvisorReport. Trading of securities and derivatives may involve a high degree of risk and investors should be prepared for the risk of losing their entire investment and losing further amounts. Using borrowed money to finance the purchase of securities involves greater risk than using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. Interactive Brokers Canada Inc. is an order execution-only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities or derivatives. Our registered office is located at 1800 McGill College Avenue, Suite 2106, Montreal, Quebec, H3A 3J6, Canada.

Know Your Advisor: View the CIRO AdvisorReport