What is margin?
Margin trading allows you to borrow funds from our clearing firm to purchase securities. Margin trading may not suit every investor, as it does come with risks. The key points to understand about margin trading are:
You must have a minimum equity balance of $2,500 in your margin account to trade on margin.
Margin allows you to borrow money against the value of securities you already own to purchase additional securities. This can increase your buying power but also amplifies your risk.
You must pay daily interest on the amount borrowed and maintain sufficient equity in the account. If your equity falls below requirements, you may face margin calls to add funds or liquidate positions.
Losses are magnified when trading on margin, and you can lose more than your initial deposit. You are liable for the amount borrowed plus interest charges.
Redbridge can increase margin requirements at any time without notice based on market conditions and risk. You must comply promptly or positions may be liquidated.
For more information on margin, see the SEC’s Investor Bulletin here.