Can anyone tell me if a person can buy mortgage-backed securities on margin?
I understand the risk of buying on margin. I am just wondering if it is possible.
2006-08-17 03:32:12 · 3 answers · asked by Today is the Day 4 in Business & Finance ➔ Investing
Yes, you can buy them on margin. The problem with that is that at this time the margin interest rates are probably higher than the returns on the bonds.
Check with the major online investment house, TD Ameritrade, Scottrade, Schwab.
2006-08-18 20:31:58 · answer #1 · answered by Rrf00 3 · 0⤊ 0⤋
Mortgage-backed securities are usually Fannie Mae (FNMA) or Freddie Mac (FHLMC) bonds. Usually you'd buy this type of bond as a very conservative investment and I'm not sure it would be a good idea to buy on margin since they can be a little risky and the cost of the margin interest could outweigh whatever profit you would earn. I think that unless you are an institution investor with millions of dollars, you wouldn't want to dabble in this type of security directly. You'd be better off investing a bond fund through a mutual fund....
2006-08-19 15:31:37 · answer #2 · answered by mortgageguy 2 · 0⤊ 0⤋
I don't believe so....
2006-08-17 10:49:53 · answer #3 · answered by kcincon 3 · 0⤊ 0⤋