Margin Interest
Categories: Investing, Bonds, Accounting, Metrics
When you open a margin account in a brokerage, you can borrow money against the stocks and securities in your account. Have $50,000 to invest? The brokerage may give you another $25,000 to invest so you can be making profits on $75,000.
Nice deal, but it doesn't come free. Like all borrowed money, there is a cost or interest rate involved. The cost of borrowing money through your brokerage is known as margin interest.