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Borrow
Funds at Attractive Interest Rates
Using Your Securities as Collateral.
If you have marginable securities in your CBC account, you may
borrow funds from Penson Financial Services to buy additional
securities or to make purchases. Your securities serve as automatic
collateral for low-cost margin loans.
What are marginable securities? In general, these are
securities traded on the major U.S. exchanges that sell for
at least $5 per share. Many over-the-counter (OTC) stocks are
also marginable.
What are basic margin requirements? Margin loans can
be extended for marginable securities held in most CBC accounts
except retirement and custodial accounts. You can borrow a maximum
of 50% of the current value of the marginable securities in
your account. You also need a minimum equity of $5,000 or more.
What are the margin interest rates? The interest on margin
loans is based on the Penson Financial Services leading ratio (IELR), which
as of April 10, 2006, is 8.45%. There is no set repayment
schedule. You can repay principal at your convenience, making
monthly interest payments only. |
Average
Debt Balance
$0-$25,000
$25,001-$50,000
$50,001-$75,000
$75,001 and above |
Rate
IELR+3%
IELR+2 3/4%
IELR+2%
IELR+1 1/2% |
If
you have any questions about this rate, please contact
your Account Representative.
Margin trading offers the experienced investor the opportunity
to leverage investment dollars. Margin trading should be undertaken
only after the risks associated with this type of trading have
been clearly recognized and understood. For further explanation
of margin trading, click
here.
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