[Retired at 31]

I have never used one - my current brokerage account is all paid for. What is the typical ratio provided? Say with 100K in securities, could one expect a 75K limit? Are interest rates as good as a heloc? (Ie. prime). And finally can this margin be pulled from the account, or is the loan granted with the requirement that you buy more securities.

I'm looking at a business expansion and would prefer not to have to sell securities to raise cash. Keeping the securities and borrowing against them is appealing to me....

 

[Retired at 31]

Answering my own questions...

With TD Waterhouse, interest rate is currently prime + 1.25%

Available limit varies depending on the type of security, exchange, value, etc.

http://www.tdcanadatrust.com/planning/investing/margin.jsp

And, yes, funds can be extracted from the account - they don't need to be kept inside to buy more stocks, bonds, etc.

 

[FrugalTrader]

This is an article I wrote a little while back on the basics of how margin works.