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MARGIN TRADING

Consider adding margin to your account

Learn how you can use margin to buy securities and diversity your portfolio with your Merrill Edge Self-Directed account.
Log in to apply for margin trading at Merrill
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Use margin to help fund your financial goals

Margin is an extension of credit that allows you to use margin eligible securities as collateral. You can borrow against the value of your securities to buy additional securities or short sell securities. There are significant risks involved with borrowing on margin.

Margin Basics:

Want to get more details about margin lending? Take a look at the Merrill Edge Margin Lending Handbook (PDF)
Open a margin account with Merrill
Interest is charged based on the amount of money you borrow
You must maintain a required equity level in your account
You can repay the loan at any time by depositing cash or selling securities
There is no
set repayment
schedule
You must understand the risks before opening a margin account

Margin can be a resource for experienced investors who understand all the advantages and risks involved

Advantages

Ability to purchase additional securities

Because margin is an extension of credit, you can use your margin loan to purchase additional securities.

Increased profit potential thanks to leverage

A margin account may increase your profit potential by leveraging your margin eligible securities to buy additional securities on credit.

Access to advance trading strategies

Margin provides access to various advanced trading strategies designed to take advantage of short-term opportunities, generate income or hedge against other investment risks (examples of advanced trading strategies may include certain types of options trading and short selling).

Risks

Forced liquidation in response to security value loss

If your securities that are held as margin collateral lose value, it may force the liquidation of securities in your account to satisfy margin calls, and we may do so without contacting you. You are not entitled to choose which securities are liquidated, we can increase our maintenance margin requirements at any time and we are not required to provide you advance written notice. You are not entitled to an extension of time on a margin call.

Amplified losses in adverse market conditions

Potential losses may be significantly greater due to leverage if there is adverse market movement. Your losses can potentially be greater than the amount that you invest.

Additional risk when using advanced trading strategies

Advanced trading strategies can be subject to significant price volatility, and trading losses can greatly exceed income or profit potential in some cases.

Estimate your margin rate

Use this calculator to find your estimated margin interest rate.
This calculator is a hypothetical illustration derived solely from your inputs for educational purposes only. When working with the calculator, please remember the dollar amounts and rates displayed aren't guaranteed. and what you actually pay may be different The values provided do not represent the performance of any actual investments, and do not account for the fees and expenses associated with investment activities. Individual results will vary. The calculator is designed to be informational and educational only and does not constitute investment advice.

Additional resources

Item 1 of 2: 

WHAT IS A MARGIN CALL?

Learn how you may be able to avoid margin calls
Item 2 of 2: 

WHAT ARE TRADING VIOLATIONS?

Tips to avoid trade violations in a cash account and a margin account

Ready to get started?

If your Merrill Edge Self-Directed account has at least $2,000 in cash or margin eligible securities, you just need to log in to start the application process.
Apply now for margin trading at Merrill
Not yet a Merrill client? Open an account  with Merrill
If you have questions, give us a call at 888.637.3343

Frequently Asked Questions

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Footnote 
Options involve risk and are not suitable for all investors. Certain requirements must be met to trade options. Before engaging in the purchase or sale of options, investors should understand the nature of and extent of their rights and obligations and be aware of the risks involved in investing with options. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options (PDF)" before considering any option transaction. You may also call the Investment Center at 877.653.4732 for a copy. A separate client agreement is needed. Options contracts are assessed a per-contract charge and may incur an additional per trade commission for rep-assisted orders.
Footnote 
When you purchase securities, you may pay for the securities in full, or if your account has been established as a margin account with the margin lending program, you may borrow part of the purchase price from Merrill. If you choose to borrow funds for your purchase, Merrill's collateral for the loan will be the securities purchased, other assets in your margin account, and your assets in any other accounts at Merrill. If the securities in your margin account decline in value, so does the value of the collateral supporting your loan, and, as a result, we can take action, such as to issue a margin call and/or sell securities in any of your accounts held with us, in order to maintain the required equity in your account. If your account has a Visa® card and/or checks, you may also create a margin debit if your withdrawals (by Visa card, checks, preauthorized debits, FTS or other transfers) exceed the sum of any available free credit balances plus available money account balances (such as bank deposit balances or money market funds). Please refer to your account documents for more information.

Before opening a margin account, you should carefully review the terms governing margin loans. For Individual Investor Accounts, these terms are contained in the Margin Lending Program Client Agreement. For all other accounts, the terms are in your account agreement and disclosures. It is important that you fully understand the risks involved in using margin. These risks include the following:
  • You can lose more funds than you deposit in the margin account. A decline in the value of securities that are bought on margin may require you to provide additional funds to us to avoid the forced sale of those securities or other securities in your account(s).
  • We can force the sale of securities in your account(s). If the equity in your account falls below the maintenance margin requirements or Merrill's higher "house" requirements, we can sell the securities in any of your accounts held by us to cover the margin deficiency. You also will be responsible for any shortfall in the account after such as sale.
  • We can sell your securities without contacting you. Some investors mistakenly believe that they must be contacted for a margin call to be valid, and that securities in their accounts cannot be liquidated to meet the call unless they are contacted first. This is not the case. We will attempt to notify you of margin calls, but we are not required to do so. Even if we have contacted you and provided a specific date by which you can meet a margin call, we can still take necessary steps to protect our financial interests, including immediately selling the securities without notice to you.
  • You are not entitled to choose which securities in your account(s) are liquidated or sold to meet a margin call. Because the securities are collateral for the margin loan, we have the right to decide which security to sell in order to protect our interests.
  • We can increase our "house" maintenance margin requirements at any time including on specific securities experiencing significant volatility and are not required to provide you advance written notice. These changes in our policy may take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause us to liquidate or sell securities in your account(s).
  • You are not entitled to an extension of time on a margin call. While an extension of time to meet margin requirements may be available to you under certain conditions, you don't have a right to the extension.
If you have any questions or concerns about margin and the margin lending program, please contact the Merrill Investment Center at 855.332.5920.
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