facebookIB Cash Account vs Margin Account. What’s your advice? - Seedly

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Alvin

Edited 01 Nov 2021

General Investing

IB Cash Account vs Margin Account. What’s your advice?

If I opened a cash account and deposit 1k in the account, does it means that I will only have 1k for any purchases? Can I make a purchase above 1k? If so, what will happen? Interest will be charged?

Discussion (3)

What are your thoughts?

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Margin for me, because I love to leverage~ but max 1.3x

Nicholas Beh

Nicholas Beh

02 Nov 2021

Student Ambassador 2020/21 at Seedly

To add on to what YJ has mentioned, margin account is much more flexible than a cash account.

One issue encountered by IBKR users sometimes is that they are unable to buy stocks immediately after converting currency. This is due to mismatches in the settlement dates between the different markets - for example, the currency conversion may take 1 additional business day to settle due to a public holiday here in Singapore.

A margin account will not encounter such issues, but in such a circumstance you might incur a day's worth of interest. It's worth it (in my opinion), especially if you are trying to capture price movements to your advantage.

  • Cash account, $1k deposit can only buy $1k of stocks. U cant buy above it, u should get an error m...

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