Learn about margin accounts and you can use them.
As a margin account holder, you have the option to borrow money from us to invest. By doing so, you’ll have more money to buy more shares than you’d normally be able to. If your investments increase in value – you earn more money. On the flip side, if your investments decrease in value, you’ll incur larger losses.
While margin accounts are primarily known for their borrowing feature, they have many other benefits, such as:
- Short-selling - Short-selling is only available in non-registered (margin) accounts
- No contribution limits - Unlike registered accounts, there are no limits on the amount you can contribute to your non-registered margin account
- Joint account ownership - Margin accounts can have two account holders
- Greater trading flexibility - With margin accounts you have access to trade a greater variety of securities when compared to registered accounts.
- Tax advantages - In Canada, only 50% of your capital gains are taxable as income. For instance, if your investments earn $1,000, you’ll pay tax as if you made $500.
- Enable complex option trading - with margin accounts, you can enable level 3 & 4 options which include spreads, naked options, and more.
