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Margin Trading - The rules

Overview

This course is designed to help you identify trading behaviors that could potentially have negative consequences and most importantly how to avoid such violations. In addition, learn where to locate account specific details on Fidelity.com that can help you monitor your trading balances and activity along the way.

Objectives

When you complete this course, you will:

  • Be familiar with the margin requirements that apply to day traders, the type of activity that will result in a day trade call, and how to manage a day trade call
  • Identify how trading violations may occur in a cash account and know the consequences of these violations
  • Identify how trading violations may occur in a margin account and know the consequences of these violations
Course Outline
Title Type Highlight
1. Margin requirements for day traders Article
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It’s important to note that some securities and trading patterns can significantly impact your ability to day trade on margin.

It’s important to note that some securities and trading patterns can significantly impact your... More
2. Avoiding cash account trading violations Article
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If you plan to trade strictly on a cash basis, there are three types of potential violations you should aim to avoid: cash liquidations, good faith violations, and free riding.

If you plan to trade strictly on a cash basis, there are three types of potential violations you... More
3. Limited margin trading within an IRA Article
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Limited margin means you can use unsettled cash proceeds in your IRA to trade stocks and options actively without worrying about cash account trading restrictions or potential good faith violations.

Limited margin means you can use unsettled cash proceeds in your IRA to trade stocks and options... More
4. Avoiding margin account trading violations Article
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It’s easy to encounter problems if you are an active trader and don’t fully understand margin account trading.

It’s easy to encounter problems if you are an active trader and don’t fully understand margin... More

Want more?

Understanding the benefits and risks of margin

  • By Fidelity Learning Center

Avoiding and managing margin calls

  • By Fidelity Learning Center

Margin trading entails greater risk, including, but not limited to, risk of loss and incurrence of margin interest debt, and is not suitable for all investors. Please assess your financial circumstances and risk tolerance before trading on margin. Margin credit is extended by National Financial Services, Member NYSE, SIPC.

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