1

I'm trying to understand how the margin interest charge is calculated when you borrow money from a broker like Fidelity to buy stocks for intraday trades.

If the rate is 8% then is the daily charge should be 8% / 365 or 0.0219% of how much you borrowed? Or if you buy and then sell the stock on the same day then the broker does not charge you any interest?

Improve this question

1 Answer 1

Reset to default
1

If you buy the underlying on margin and you hold the position overnight then you owe the broker margin interest. This amount would be the borrow rate times the amount borrowed times the number of days held, divided by 365. There is no margin charge for day trades.

Improve this answer

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .