How does a broker benefit from a client who buys stock on margin?

1 ⤊

How does a broker benefit from a client who buys stock on margin?

What does he get in return for loaning the money?

2007-01-26 04:18:39 · 3 answers · asked by Anonymous in Business & Finance ➔ Investing

3 answers

The brokerage gets a commission and also gets to charge interest on the debit balance on the margin account. Margin Debit is how a great deal of money is generated for the brokerage.

2007-01-26 04:26:37 · answer #1 · answered by dashel_gabelli 3 · 1⤊ 1⤋

Broker earns the commision when the client buys or sells the stock. For stock of margin, it just boost up the amount of money loan to the client (normally 5 times of the deposit to client's trading account) for investing more. By investing more money to stock, obviously the broker earns more commision.

2007-01-26 04:48:57 · answer #2 · answered by Dang 3 · 0⤊ 1⤋

1) He charges.
2) Money.

2007-01-26 12:53:42 · answer #3 · answered by Anonymous · 0⤊ 2⤋