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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 online invest application. If you already have a margin account, give us a call or go online to request funds. 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. You need to have a minimum of $2,000 in your account to borrow or buy on margin. 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.

Calculate Potential Returns or Losses

See an example of margin trading in action with our margin trading calculator.

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.

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 prevent a margin call.

Keep in mind

Because the market values of stock frequently change, both up and down, there is always 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.

Margin Account Rates

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

Margin Balance Our Rates
$1,000,000+ 5.25%
$500,000-$999,999 6.00%
$250,000-$499,999 6.50%
$100,000-$249,999 7.50%
$50,000-$99,999 8.75%
$25,000-$49,999 9.50%
$10,000-$24,999 9.75%
$.01-$9,999 9.75%

Margin Account Education

An informed trader is a smarter trader.

Margin Account Details

The base rate of 4.00% is set at Ally Invest Securities' sole discretion with reference to commercially recognized interest rates, such as the broker call loan rate. All rates are tiered using the Base Rate plus a standard percentage. Base rates and balance tiers are subject to change without notice.

Commissions and fees from published web sites as of 09/28/2018. Some brokers may offer more competitive fees than the ones published if certain balances or level of activity are met. Please contact each broker individually to confirm their commission schedule. Rates are negotiable for active traders. Contact us to learn more.

Margin Requirements

Long Stock: Equities between $3.00 and $6.00

Initial and Maintenance

50% of purchase price

Long Stock: Equities above $6.00

Initial

50% of purchase price

Maintenance

30% of current market value (50% for concentrated accounts, when one security constitutes 50% or more of the account market value, 40% when one position constitutes 35-50% of the account market value and 35% when a position constitutes 25-35% of the account value).