Is margin right for you?
Understanding and considering the benefits and risks associated with margin is important in determining whether margin is right for you.
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Margin can be an advantageous tool.
- Leverage the assets in your portfolio to own more securities than you could with cash alone, thereby increasing your potential return.
- Quick access to funds without Tooltip your current assets to potentially take advantage of timely market opportunities.
- Provides a ready source of credit with repayment flexibility that can be used for personal financial needs, including emergency expenses, debt consolidation, tuition, taxes, smoothing cash flow, or home repairs.
- Increase your ability to Tooltip and profit from stock declines.
- You only need $2,000 worth of eligible securities to start borrowing on margin once your account is margin enabled.1
Important risks of margin.
- Tooltip , increases when there are significant downward price fluctuations to securities in your account. Stay connected and actively manage your account.
- Leveraging exposes you to greater downside risk than cash purchases because you must repay your margin loan, regardless of the underlying value of the securities you purchased.
- Schwab can change its Tooltip at any time without prior notice.
- If the Tooltip in your account falls below the minimum maintenance requirements (30% for most securities), you'll have to deposit additional cash or acceptable Tooltip .
- If you fail to meet your minimums, Schwab may be forced to sell some or all of your securities, with or without your prior approval.
- Interest accrues at current market rates, which could increase (or decrease) during the time you have an outstanding loan.
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Tips for managing margin risk.
Always have a plan
Develop a risk management strategy for your margin-based investments that is consistent with your market outlook and stick to it.
Create contingency plans for dealing with potential margin calls and have a repayment plan ready if the market turns against you, if margin maintenance requirements rise, or if margin interest rates rise.
Don't be fully leveraged
Borrow less than the maximum amount allowable in your account. Set a personal borrowing level for yourself that is higher than Schwab's requirements and actively monitor your portfolio to ensure you are not going below that equity level. If your investment strategy does involve being fully leveraged, be sure to watch carefully for Tooltip .
Borrow against a diversified portfolio
This reduces the risk that a single security's drop in value will trigger a Tooltip .
Closely watch your portfolio
Be aware of what is going on in the market. Recognize that margin does bring increased risk, and consistently reassess your risk tolerance. Anticipate a potential decline in value, especially during uncertain market conditions.
Why trade margin with Schwab?
Trusted education
Access educational resources to learn more about margin and how it might fit into your investing strategy.
Competitive rates
Our competitive margin interest rates can make margin borrowing more cost-effective than other lending options like personal or unsecured loans.
Flexible payment schedule
There is no set repayment schedule as long as you maintain the required level of Tooltip in your account.
All in one place
As a Schwab client, you can manage your margin loan alongside your investments and other finances in a single, convenient location.
Get started with margin in three simple steps.
Open a brokerage account
Open an account online, call us at 866-232-9890, or visit one of 300 local branches.
Apply for margin
Log in and from Profile > click Margin & Options to "Apply for margin."
Tap into available funds
Once approved, you can tap into your available funds at any time by placing a trade, writing a Schwab One® check, placing a wire transfer, requesting a check, or using your Schwab One Visa® Platinum debit card. No additional forms or applications are required.
Learn more about margin loans.
Ready to start investing?
Open a Schwab One Brokerage account where you can apply for margin.
Already a Schwab client?
Log in and find out if your account is enabled for margin.