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Margin Trading

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What is margin trading?

Margin trading allows Axos Elite members to access funds without having to liquidate assets. Instead, you use your portfolio as collateral for a loan, as long as you have the required $2,000 minimum balance in account equity. This increased buying power lets you take advantage of potential market opportunities when they arise.

Margin loans can also be used to access cash from your account to pay another expense. Like any loan, you repay the amount borrowed with interest. While margin can provide increased purchasing power or cash out without selling securities, it is important to understand the risks before getting started.

Margin trading gives Axos Elite members the opportunity to:

Borrow at a competitive 5.5% rate*
Purchase more securities than your available cash balance.
Secure a line of credit with the potential for repayment flexibility based on the required level of account equity.

* Subject to change without notice
 

Greater power comes with greater responsibility.

Margin trading increases your potential investing power but has additional risks. Before starting with any our margin trading service against your portfolio, you should take the time to understand your responsibilities.

Covering Losses

Margin calls can require you to deposit additional cash or securities or liquidate securities in your portfolio as coverage.

Paying Interest

You will need to pay interest costs associated with using margin lending.

Loss Risk

Margin lending includes a risk of greater loss than return, which could include your entire investment – or more.

Loan Repayment

Like any loan, margin must be repaid regardless of the value of the securities purchased with the funds.

How margin trading works.

This margin trading example shows how to purchase 100 shares of a $50 stock on margin:

   
You invest $2,500 of your funds
You borrow $2,500 on margin
Total stock purchase $5,000
Gain example Loss example
Stock
performance
Rises to $60 Falls to $40
New value for
100 shares
$6,000 $4,000
Repayment
amount**
($2,500) ($2,500)
Value remaining
after repayment
$3,500
(Profit $1,000)
$1,500
(Loss $1,000)
Stock Performance Rises to $60
New Value for 100 Shares $6,000
Repayment Amount* ($2,500)
Value Remaining After Repayment $3,500 (Profit $1,000)
Stock Performance Falls to $40
New Value for 100 Shares $4,000
Repayment Amount* ($2,500)
Value Remaining After Repayment $1,500 (Loss $1,000)

**Excluding interest and fees, amounts presented for purchase are based on initial purchase amounts. Market activity (gains or losses) are truly hypothetical in nature.

You can apply for margin lending on your account, but please note that margin lending is subject to approval.

Get margin trading with Axos Elite.

Want a hands-off approach? Check out Managed Portfolios.