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Arthur

Account Types

By Arthur, in Beginners Forum

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Arthur    10

Arthur
Posted

Hi all

I came through the article where the author has stated that there are 3 types of account. It stated that the brokerage houses offers cash account, margin account and option account. What type of account must be posses by me in order to trade? Is there any plus and minus of different accounts? Which will be the most suitable for beginners like me? It stated that margin account has more added benefits along with some complications and lengthy procedures. Is that true?

Regards

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Tradewinds    12

Tradewinds
Posted

With a margin account, the broker lends you money to purchase securities, . . . if you spend more than the amount of cash in your account. In other words, you can spend more money than you really have:

 

http://www.investopedia.com/terms/m/marginaccount.asp

 

Some brokers don't offer anything other than a margin account. Personally, I wouldn't purchase "on margin" unless you have at least months of proven trading success.

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