What is Margin Trading? Your Margin Account Explained!

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DISCLAIMER:
This video is for entertainment purposes only. I am not in any way acting as an agent or representative of the Department of Defense or United States Federal Government when presenting this information. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video.

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[Trashpanda]

If you start using margin, start very small. Don't leverage half your account value, start small. I would be willing to leverage up to $500 on a 20k+ account. Set limits

[LMF-ctlt]

You always give the most simple and understandable explanations of how things work.

[scotthenderson]

This is exactly why I don't have a margin account. Very well done

[betruetoyourself]

Thanks, great explanation. I finally understand it

[lagaleven]

Hey Jake! Did you know the add playing before your video is saying you can’t learn how to trade on You Tube? Think you have been proving him wrong with your latest series of videos on understanding the stock market. Keep it up Broe.

[tubaljohn]

Thank you. This was very helpful because I am with Schwab as well.

[tillythuku]

Thank you so much!!! This was easy to understand. I took all the notes and now I'm ready to go!
First time I see your channel. Subscribed!

[itsyagirlp]

Great explanation! It really helped me understand

[mytj]

Subscribed! Best video that explains it.

[JGGarcia-khuq]

Thank you Jake, your videos are always helpful.

[kylemoore]

I miss this Jake. The one who didn’t just talk about daily news.

[OberynPinkViper]

Thanks for the great explanation and the example. It sounds so risky, it's something I'd always just avoid.

[gadimidorielan]

Here's two questions:

1. This interest rate that you mentioned above, depending on the size of your account. Is that a one-time interest rate taken from your account for the loan you borrowed or is it a yearly interest rate. In other words, if you never sell any of your securities for years, will the broker take their interest every year over the course of a decade, just because the loan is still active.

2. If I began margin trading, and I borrowed 2, 000 from the Charles Shwab, if a few weeks later I deposited the 2, 000, not real change occurred to my equity balance, will that newly deposited 2, 000 go directly to the margin loan I borrowed from Shwab. In other words, if I was margin trading a week ago, and I did not want to get pay the interest, could I just deposit more money the following week to get rid of the margin loan. Or the interest will always be subtracted from the account at the end of the year?

[c-los]

Great video, can you answer just one one question, if I borrow for example 25k from margin to buy an ETF how much do I owe my brokerage a month. Thank you.

[dirkplummer]

Thanks for the easy to understand explanation!

[drfunkypunk]

Great video. So if i have a margin account, can i just use my own money without borrowing from my broker (i.e. x1 leverage)? That way i eliminate the risk of losing more than my investment - but i keep other benefits of having a margin account like being able to short sell.

[calledout]

Oh man I got excited at first when I saw those margin rates from Schwab, then realized oops this is 3 years ago. Of course.

[charlestackett]

Great advice. Take a pause every so often or create contrast.

[aronKlay]

Great Video Jake!! Quick Question: If 2 traders open identical 1 standard lot and 1 person has 1:2 leverage whilst another has 1:1000 leverage. Trade goes out-of-the money by 100 pips and both close their positions, who loses more? or do they both lose $1000 since both positions sizes were identical.

[Spinattitude]

Just another fantastic winner of a video!