i.e. If I do not trade at all I get interest on my money at the brokerage account since they invest it in a money market account or bank deposit.
If I trade and do not close my positions then I will not get interest on the capital used in those positions.
But what happens if I close out all positions at the end of each trading day?
2006-10-02 03:48:07 · 3 answers · asked by eltouro 2 in Business & Finance ➔ Investing
You would get interest on any money that is in your account overnight. However, you should realize that when you close out a position, it usually doesn't settle on the day you trade. That means no interest until the settlement date.
The brokerage wouldn't mind doing this for two reasons. The first is that they earn more money than you do on overnight accounts. The second is that they are going to love all the transaction fees you generate by closing out of your positions at night and entering into new ones in the morning.
2006-10-02 04:22:33 · answer #1 · answered by Ranto 7 · 1⤊ 0⤋
Most brokerages do NOT pay interest on assets not carried over to the next day.
We pay on all cash not used for that trade date.
I think we are paying near 4.5% ( Better than most banks )
2006-10-02 10:57:07 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You should get some very small amount of intrest, but ever brokerage is different. Ask them.
2006-10-02 10:56:21 · answer #3 · answered by goose1077 4 · 0⤊ 0⤋