What is margin borrowing?

Margin borrowing is a feature on an Individual or Joint brokerage account in which the broker (ShareBuilder) extends credit to you, the customer, to purchase securities or to withdraw excess cash for use outside your account. The account equity (securities and cash) is used as collateral for the loan that is taken out in the account.

If the value of the stock in the account increases, the buying power and loan availability of your account increases. Conversely, if the value of the stock drops sufficiently, you will be required to deposit more cash or sell a portion of the stock to cover a margin call.

Important: Buying securities on margin is not appropriate for all investors. Before investing on margin, please read the Margin Account Agreement for important risk disclosure information, and see ShareBuilder's margin interest rates.