Is margin right for you?
Understanding and considering the benefits and risks associated with margin is important in determining whether margin is right for you.
Margin can be an advantageous tool.
- Leverage the assets in your portfolio to own more securities than you could with cash alone, thereby increasing your potential return.
- Quick access to funds without Tooltip your current assets to potentially take advantage of timely market opportunities.
- Provides a ready source of credit with repayment flexibility that can be used for both investing and personal finance needs.
- Increase your ability to Tooltip and profit from stock declines.
- You only need $2,000 worth of eligible securities to start borrowing on margin once your account is margin enabled.1
Looking to borrow against your investment assets for personal or business needs? A Pledged Asset Line® from Charles Schwab Bank offers lines of credit starting at $100k with competitive rates and relationship-based pricing.
Important risks of margin.
- Tooltip , increases when there are significant downward price fluctuations to securities in your account. Stay connected and actively manage your account.
- Leveraging exposes you to greater downside risk than cash purchases because you must repay your margin loan, regardless of the underlying value of the securities you purchased.
- Schwab can change its Tooltip at any time without prior notice.
- If the Tooltip in your account falls below the minimum maintenance requirements (30% for most securities), you'll have to deposit additional cash or acceptable Tooltip .
- If you fail to meet your minimums, Schwab may be forced to sell some or all of your securities, with or without your prior approval.
- Interest accrues at current market rates, which could increase (or decrease) during the time you have an outstanding loan.
Tips for managing margin risk.
Always have a plan
Develop a risk management strategy for your margin-based investments that is consistent with your market outlook and stick to it.
Create contingency plans for dealing with potential margin calls and have a repayment plan ready if the market turns against you, if margin maintenance requirements rise, or if margin interest rates rise.
Don't be fully leveraged
Borrow less than the maximum amount allowable in your account. Set a personal borrowing level for yourself that is higher than Schwab's requirements and actively monitor your portfolio to ensure you are not going below that equity level. If your investment strategy does involve being fully leveraged, be sure to watch carefully for Tooltip .
Borrow against a diversified portfolio
This reduces the risk that a single security's drop in value will trigger a Tooltip .
Closely watch your portfolio
Be aware of what is going on in the market. Recognize that margin does bring increased risk, and consistently reassess your risk tolerance. Anticipate a potential decline in value, especially during uncertain market conditions.
Why trade margin with Schwab?
Trusted education
Access educational resources to learn more about margin and how it might fit into your investing strategy.
Competitive rates
Our competitive margin interest rates can make margin borrowing more cost-effective than other lending options like personal or unsecured loans.
Flexible payment schedule
There is no set repayment schedule as long as you maintain the required level of Tooltip in your account.
All in one place
As a Schwab client, you can manage your margin loan alongside your investments and other finances in a single, convenient location.
Get started with margin in three simple steps.
Have an eligible account
A Schwab brokerage account with at least $2,000 in cash or marginable securities is required to use margin. Don't have an account with us yet? Open an account online or call 866-855-9102.
Verify you're margin approved
Once logged into your account, visit the Margin & Options Access page to view your margin access status and apply for approval if needed.
Tap into available funds
Use your margin account to place trades with enhanced buying power or to withdraw funds as a short-term loan.1
Ready to start using margin?
Already a Schwab client?
Log in to your brokerage account to view margin access status and apply for margin if needed.