An account must have a balance of at least $2,000 and be approved for margin trading in order to participate. Then, in contrast to a cash account, buying power is calculated by considering the amount of cash in your account plus the funds you can borrow from your broker. There are a variety of factors that go into this calculation, including overall account balance, current equity, and the specific securities held in your account.
It is important to closely monitor your account’s margin requirements, as to avoid triggering a margin call.
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