Investing

Margin investing - BMO

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  • Jul 27th, 2020 9:42 am
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[OP]
Sr. Member
Dec 26, 2019
678 posts
1144 upvotes

Margin investing - BMO

I’m thinking about investing in margin in my BMO margin account and I’m looking to learn more about they work.

- Is interest charged the same way as a credit card? Ie you get a statement each month stating how much you owe?
-Is the margin requirement based on your total assets in your account? For example, if I have 100k invested and borrow another 10k, I would only get margin called the value if all assets (ie the 100k) drop below the margin requirement, right? So I wouldn’t have to worry about the value of that one particular equity.

Note that I’m aware of the risks involved. Just looking to learn more about how they work.

Thanks
2 replies
Deal Addict
Jul 12, 2008
4609 posts
1324 upvotes
GTA
I haven’t done it BMO but I have read about it and used it with other banks/discount brokerages

- Interest is charged the same way but the interest rate is usually a lot lower since this is a secured loan. TD charges 5% at the moment.

- It is based on how much you have in your margin account, if you have a separate RRSP account for instance anything you have there won’t give you more margin space.

Margin call happens when you don’t have enough equity to cover the value of your current holdings. So for securities that are 50% margin, you always have to have 50% in there if stocks drop.
[OP]
Sr. Member
Dec 26, 2019
678 posts
1144 upvotes
Great thank you. I’m going to give BMO a call today to wall through some of these details with them.

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