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Take a closer look at margin accounts.

A little more knowledge goes a long way.


How margin trading works.

A margin account can help you get a step ahead.

This type of account allows you to borrow from your portfolio so you can get cash to seize other opportunities. We lend you the money you need using the securities in your account as collateral, which you can use to buy additional securities or withdraw the funds to pay for another expense. Like any loan, you pay us back with interest.

 

Weigh the risks and potential reward

Borrowing on margin amplifies the potential of return on your investment, but should stock prices take a dip, you could lose your entire investment or more. Learn more about the risks of margin trading

Add margin to an account

If you don’t already have an Ally Invest account, you can apply for a margin account in our Ally Invest application. If you have an Ally Invest account that doesn’t have margin, log in to your account and select All Settings from the Settings dropdown. Select Add Margin to My AccountLearn more about margin requirements

 

Borrow

You can see how much is available for withdrawal in the Cash & Balances tab of your Holdings page. Initiate a transfer in the Transfers dropdown to move the money to another account or request a check.


Buy

When you choose to buy on margin, you simply put the money toward the securities you want. You can see how much buying power you have for stocks and options in the Cash & Balances tab of your Holdings page. When you go to purchase the securities, it will automatically be purchased on margin.

Weigh the risks and potential reward

Borrowing on margin amplifies the potential of return on your investment, but should stock prices take a dip, you could lose your entire investment or more. Learn more about the risks of margin trading

Add margin to an account

If you don’t already have an Ally Invest account, you can apply for a margin account in our Ally Invest application. If you have an Ally Invest account that doesn’t have margin, log in to your account and select All Settings from the Settings dropdown. Select Add Margin to My Account.

Learn more about margin requirements

Borrow

You can see how much is available for withdrawal in the Cash & Balances tab of your Holdings page. Initiate a transfer in the Transfers dropdown to move the money to another account or request a check.

Buy

When you choose to buy on margin, you simply put the money toward the securities you want. You can see how much buying power you have for stocks and options in the Cash & Balances tab of your Holdings page. When you go to purchase the securities, it will automatically be purchased on margin.

Potential returns or losses.

See an example of margin trading in action.

Purchase Price = $30/share

 

Using your own money, you could purchase 1,000 shares at $30 per share. If you use margin, you can increase the number of shares you can buy. Let’s say you buy 1,500 shares. At this point your total portfolio with margin would be $45,000, instead of the $30,000 you could’ve bought with just your money.

Stock price increases to $50/share

 

The value of the stock you bought goes up to $50. With the 1,500 shares you bought on margin, your total portfolio is worth $75,000. If you decide to sell at this point, you still have to pay back the $15,000 loan but your gains would be $10,000 more than if you had only used your money instead of margin.

Stock price decreases to $20/share

 

The value of the stock you bought goes down to $20. With the 1,500 shares you bought on margin, your total portfolio is worth $30,000. If you decide to sell at this point, you still have to pay back the $15,000 you borrowed, so you’re actually left with $15,000. If you hadn’t borrowed on margin, you’d have $20,000 of your money left.

These amounts don't include interest or fees. The example assumes you can borrow up to 50% of your account value, but the percentage can vary depending on the security.

 

You can mitigate these risks by borrowing in smaller amounts and by monitoring the value of the securities to the prevent a margin call.

Keep in mind

Because the market values of stock frequently change, both up and down, there is alwyas a risk that the value of the stock you use as collateral for cash or trading could dip below the amount you borrowed against. In that case, you would need to repay the difference in cash or contribute more securities to cover it

Explore margin account rates.

Our margin account rates are tiered, so the higher your loan amount, the lower your interest rate.

MARGIN BALANCE ALLY INVEST E*TRADE TD AMERITRADE WELLS TRADE
$1,000,000+ 5.25% 7.25% 7.75% 8.00%
$500,000 - $999,999 6.00% 8.25% 8.50% 8.50%
$250,000 - $499,999 6.50% 8.75% 8.50% 9.00%
$100,000 - $249,999 7.50% 9.25% 8.75% 9.50%
$50,000 - $99,999 8.75% 9.75% 8.25% 10.00%
$25,000 - $49,999 9.50% 10.25% 10.00% 10.50%
$10,000 - $24,999 9.75% 10.50% 10.25% 11.00%
$.01 - $9,999 9.75% 10.75% 10.50% 11.00%

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