Margin rate is a fee for using money or other assets borrowed from a broker.
What assets? For example, when opening a short position on the exchange, the trader first borrows the required number of shares from the broker. The trader must pay for this leveraged operation according to the rates of the stock broker. There is also a fee for using the broker's money for margin trading.
Margin rate is lower than the interest rates of such instruments as a loan or credit card. Therefore, traders usually prefer to pay for additional funds to a broker than to a bank.
The margin rate is calculated in % per annum. Then it is adjusted based on the duration of use of the borrowed funds.
What assets? For example, when opening a short position on the exchange, the trader first borrows the required number of shares from the broker. The trader must pay for this leveraged operation according to the rates of the stock broker. There is also a fee for using the broker's money for margin trading.
Margin rate is lower than the interest rates of such instruments as a loan or credit card. Therefore, traders usually prefer to pay for additional funds to a broker than to a bank.
The margin rate is calculated in % per annum. Then it is adjusted based on the duration of use of the borrowed funds.
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