What is a margin account?

A margin account allows you to borrow cash from Firstrade to purchase securities. The loan in the account is collateralized by the securities you purchase. You may also trade in a margin account with your own cash. No extra interest or fees will be charged if you do not borrow money from Firstrade or exceed your cash buying power. Trading in a margin account would allow you to use unsettled funds; this will avoid all the settlement date related violations that could happen in a cash account.

While you hold securities using margin, if the value of the stock drops significantly, the account holder will be required to deposit more cash, more marginable securities, or sell a portion of the securities to maintain the minimum margin requirements.

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