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What is the interest on margin trading and short selling?
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What is the interest on margin trading and short selling?

1) Margin interest is only charged for leveraged positions held overnight.

2) For a long position, the daily interest= Borrowed Cash * Margin Rate/360.

Margin Loan (USD)Annual Margin Rate
0-25,000.006.99%
25,000.01-100,000.006.49%
100,000.01-250,000.005.99%
250,000.01-500,000.005.49%
500,000.01-1,000,000.004.99%
1,000,000.01-3,000,000.004.49%
>3,000,000.003.99%

Let us assume you leveraged $30,000, held the position for two days, and then sold it. The margin interest charged will be [25,000 * 6.99% + (30000 - 25,000) * 6.49%] * 2/360 = $11.51. You will be charged $11.51 at the beginning of the next month.


Fees for short sale

For a short position, you need to borrow shares. The cost associated with a short sale is the fee for borrowing said stock. This fee changes every day for every available stock and is charged on a daily basis.

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