Fidelity Margin account options

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michaeljc70
Posts: 10965
Joined: Thu Oct 15, 2015 3:53 pm

Fidelity Margin account options

Post by michaeljc70 »

I opened a Fidelity brokerage account to be my taxable brokerage account and also act as my checking account (pay bills). I decided to add margin just in case. I don't plan on needing it, but rather than have a bill pay/auto draft bounce it would come out of margin. This is unlikely as Fidelity as I would typically keep plenty in the MM sweep. If I don't make a mistake, I'd never be using margin. Anyway, it asks me if I want one of two types of accounts yet doesn't really tell me the difference.

Image

My question is, which do I choose? I might want to borrow on margin if I am extremely desperate (very unlikely). Are these the same exact accounts and they just want info on how I plan on using it or is there a distinction in margin types? I've had margin accounts over the last 30 years at multiple brokerages and was never asked for a distinction.
strongboy2005
Posts: 121
Joined: Fri Aug 28, 2015 9:11 pm

Re: Fidelity Margin account options

Post by strongboy2005 »

I have the same question.
muffins14
Posts: 5780
Joined: Wed Oct 26, 2016 4:14 am
Location: New York

Re: Fidelity Margin account options

Post by muffins14 »

michaeljc70 wrote: Wed Jan 31, 2024 6:31 pm I opened a Fidelity brokerage account to be my taxable brokerage account and also act as my checking account (pay bills). I decided to add margin just in case. I don't plan on needing it, but rather than have a bill pay/auto draft bounce it would come out of margin. This is unlikely as Fidelity as I would typically keep plenty in the MM sweep. If I don't make a mistake, I'd never be using margin. Anyway, it asks me if I want one of two types of accounts yet doesn't really tell me the difference.

Image

My question is, which do I choose? I might want to borrow on margin if I am extremely desperate (very unlikely). Are these the same exact accounts and they just want info on how I plan on using it or is there a distinction in margin types? I've had margin accounts over the last 30 years at multiple brokerages and was never asked for a distinction.
I think they come with certain restrictions, though you should call to confirm.

For example there may be restrictions in the second type of account that prevent you from doing things like buying some kinds of options products or box spreads etc. I am not sure.

I have the first one (normal margin), and I used margin borrowing to finance a renovation project
Crom laughs at your Four Winds
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