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Margin Trading Overview

Benefits of a Margin Trading Account

Leverage Assets

Use the cash or securities in your account as leverage to increase your buying power.

Access Funds

Get the lowest market margin loan interest rates of any broker.

Enable Account for Short Selling

Diversify trading strategies with short selling, options and futures contracts, or currency trading.

Get a Line of Credit

Borrow against a margin account at any time and repay the loan on your own schedule.

Understand the Risks of Margin Trading

Margin borrowing is only for experienced investors with high risk tolerance.
You may lose more than your initial investment.

Before trading on margin, understand the following risks
  • Trading losses may be greater than the value of the initial investment
  • Leveraged investments create a greater potential risk of loss
  • Additional costs from margin interest charges
  • Potential margin calls or liquidation of securities

How Trading Securities on Margin Works

Rules-based Margin

Margin models determine the type of accounts you open and the type of financial instruments you may trade.

  • In rules-based margin systems, your margin obligations are calculated by a defined formula and applied to each marginable product. This is the more common type of margin strategy used by securities traders.
How Trading Securities on Margin Works
Example profit / loss on stock trade using margin: Bought 100
shares @ $40 (50 shares with cash and 50 shares on margin)

Rated Lowest Margin Fees1 by StockBrokers.com

US Margin Loan Rates Comparison2

USD 25K USD 300K USD 1.5M USD 3.5M
Interactive Brokers 4.58% 4.24% 4.03% 3.91%
E-Trade 11.45% 9.95% N/A N/A
Fidelity 10.82% 9.57% 7.00% 7.00%
Schwab 10.82% 9.57% N/A N/A
TD Ameritrade 12.00% 10.50% N/A N/A

Each firm's information reflects the standard online margin loan rates obtained from their respective websites. Competitor rates and offers subject to change without notice. Services vary by firm.

Margin Education Course on Traders’ Academy

Introduction to Margin Trading
  • Getting Started
  • Securities Margin Trading in the US
  • Commodities Margin Trading in the US
  • Margin in Practice Part 1: Trader Workstation (TWS)
  • Non-US Margin Trading
Take Introduction to Margin Trading
Infographic: What is Margin Trading
Futures trading at IBKR

Start trading like a professional today!

For more information on accolades received, visit our awards page.

Disclosures
  1. According to StockBrokers.com Online Broker Survey 2022: Read the full article Online Broker Reviews, January 11, 2022. "Professionals can take advantage of industry-leading commissions, including the lowest margin rates across all balance tiers."
  2. Annual Percentage Rate (APR) on USD margin loan balances as of 9/23/2022. Interactive Brokers calculates the interest charged on margin loans using the applicable rates for each interest rate tier listed on its website. For additional information on margin loan rates, click here

Interactive Brokers Canada Inc. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and Member - Canadian Investor Protection Fund. Know Your Advisor: View the IIROC AdvisorReport. Trading of securities and derivatives may involve a high degree of risk and investors should be prepared for the risk of losing their entire investment and losing further amounts. Using borrowed money to finance the purchase of securities involves greater risk than using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. Interactive Brokers Canada Inc. is an order execution-only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities or derivatives. Our registered office is located at 1800 McGill College Avenue, Suite 2106, Montreal, Quebec, H3A 3J6, Canada.


Know Your Advisor: View the IIROC AdvisorReport

IIROC