6 Replies to “Brokerage Account Types Explained – What Account Do You Need?”

  1. Hey Louis,

    Thanks for the article. Based on your recommendations I am keen to look at cash accounts – I want to invest a small amount to begin with then build my investment as I gain confidence, are there certain brokers you would recommend a beginner like me looking at? Thankyou for your help!

    Cheers,

    Mike

  2. This is a very good introduction to options accounts. I will have to act on them because I do want to trade penny stocks and I like how you explain margins and leverage in simple terms. I like how each section is broken down and gives me an overview of what to expect. The corporate account I never heard of but thanks for telling me because I am thinking of buying stocks via an LLC. Nice work!

  3. Hi Louis,
    This is indeed a great article. I enjoyed reading it. Very helpful article.
    I have a Margin broker account. Its written on my name and my wife. I indeed need a Margin account since I am selling naked options [puts], and sometime I even using leveraging, meaning I am “borrowing” money from the Broker, and off course I have to pay for this…. I wonder if you could shed some light on the “Margin Interest Rate” which Brokers are charging nowadays. I mean could you please tell what ranges are “good” and what ranges of interest rate are “bad”. I know each broker is different, so please provide the Averages from your experience.
    For example, I assume that 3%-5% interest rate is “Good”, but 8% and above is “BAD”. Is this assumption correct? This is based on a regular Bank account, In Israel, they Charge 8% for the first $5k, and going up to 11% if its above.
    Thanks in advance for your help
    Israel

    1. Thanks for the comment. Hopefully, I can help.
      The margin Rates don’t only vary from broker to broker, but also from account size to account size. Usually, the more money you trade with, the lower your margin rates will become.
      For instance, the broker Fidelity has a margin rate of 8.82% for $25k accounts and only a 5% margin rate for $1.5M accounts.
      11% seems slightly higher than most other American broker’s margin rates. But most brokers that I know have margin rates of around 8-10% for smaller accounts.
      You can check out this comparison to see the different margin rates of different American brokers.
      I really hope that this could give you some insights. Please let me know if you have any other questions.

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