Investing

How to know If I used margin

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  • Feb 27th, 2017 11:55 am
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[OP]
Newbie
Feb 25, 2017
15 posts
1 upvote

How to know If I used margin

Hello,

Just opened an account with questrade and I am new to this, I used a margin account and put 6k in it, Invested money in stocks etc , but now Im a bit confused about my balances

Will there be any warning or anything to tell me I'm using margin or what?

Thanks!
6 replies
Deal Guru
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Aug 8, 2012
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cchan90 wrote: Hello,

Just opened an account with questrade and I am new to this, I used a margin account and put 6k in it, Invested money in stocks etc , but now Im a bit confused about my balances

Will there be any warning or anything to tell me I'm using margin or what?

Thanks!
If your cash balance is negative you are using margin.
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Deal Addict
Oct 21, 2014
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cchan90 wrote: Hello,

Just opened an account with questrade and I am new to this, I used a margin account and put 6k in it, Invested money in stocks etc , but now Im a bit confused about my balances

Will there be any warning or anything to tell me I'm using margin or what?

Thanks!
It's hard to tell what's going on from a short description. Your best course of action would be to call Questtrade support and ask them.
Banned
Jul 18, 2016
2014 posts
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ace604 wrote: If your cash balance is negative you are using margin.
This is correct.

If I recall correctly from many months ago when I had a Questrade account, Questrade shows both a balance and your purchasing power. In most cases (there are exceptions and you should read carefully about this), the margin requirement is 30%. In other words, you must have 3$ of cash for every $10 of equity you purchase. Consequently, if you deposited 6K of cash, you would see a balance of 6K, but you would also see that you have 6K/.3 = 20K of purchasing power. This means that you can buy as much as 20K of equity with your 6K, however don't even think of doing that! It will cause an instant margin call the moment the value of your equity drops below 20K.

What all of this means is that if you buy any more than 6K of equity, you will see a negative cash balance, and this negative cash balance is charged quite a high interest rate with Questrade which is why I closed my account, since I use margin quite a bit.

Please, google about margin. Learn carefully how it works before you start using it!

Here's a link for you to read at Questrade: margin requirements
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Aug 7, 2010
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ml88888888 wrote: ..
If I recall well, when you open an account with Questrade it's automatically a margin one ...
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Jun 27, 2007
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cchan90 wrote: Hello,

Just opened an account with questrade and I am new to this, I used a margin account and put 6k in it, Invested money in stocks etc , but now Im a bit confused about my balances

Will there be any warning or anything to tell me I'm using margin or what?

Thanks!
Hi cchan90,

As ace604 said, if your balance is in the negative, you are buying on margin. To better understand this, check out our FAQ on margin call: http://help.questrade.com/how-to/freque ... LQg328rJhE

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