1. What type of account should I open?
Normally, you may want to open either a Cash account or a Margin Account (please see below). In a Cash Account, you must have 100% of cleared funds in the account before your order can be accepted. Your purchased amount cannot exceed the value of your cleared funds available. Also, we offer IRAs, Roth IRAs, Education IRAs, Trust Accounts, Keogh plan (A tax-deferred program for small business owners), 401(k), 403(b) and others. Ask our brokers for more information.

4. Do I need to deposit funds into my 488trade account before trading?
This will be based on your trade financing requirement which is dependent upon two reasons:

• Your Buying Power (BP) to 488trade
• The type of the stock you buy is marginable or not

For most America stock exchange stocks, the trade principal that does not require pre-funding is 2 times the real time buying power of your account. It means, if the current BP of your account is $80,000, you can buy marginable stocks of worth up to $160,000 without depositing funds beforehand.

However, if you are on margin call, you will need to satisfy the margin requirement before any further purchases or cash withdrawal requests can be put through.

Note:
488trade does not offer margin financing for your stocks. It is our clearing partner PENSON FINANCIAL SERVICES do.

5. What is Buying Power (BP)?
BP indicates the total value of securities, depending on their risk class, that you can immediately purchase. The figure is based upon your balance and the total marginable value of the stock portfolio in your 488trade trading account.

For margin clients, marginable value of a stock represents the amount of borrowing that can be obtained from the stock holding. For cash clients, marginable value is the amount by which your immediate BP can be enhanced; full settlement of the transaction amount is still required on the settlement date of the relevant trade.

Example,
If your BP is 80,000 in your cash account, you can purchase up to 160,000 of most American exchange listed stocks.

It demonstrates that you may not need to have the cash in your account before placing a buy order. However, you are still required to fulfill the margin call that may arise subsequent of the transaction.

6. What is margin call?
Different definitions of margin call are applicable to different types of accounts as follows:

• Cash Accounts

A Margin call will be issued when there are some overdue payments, which usually comprises trade amounts that remain outstanding after the settlement dates. Usually, cash accounts settle in next business date.

• Margin Accounts

A margin call will be issued when the marginable value of the account’s portfolio is not enough to cover the total amount outstanding under the account or in any event when the amount on a value day basis that may remain outstanding under the account is greater than the approved credit limit. Thus, the margin call amount will be the greater of the amount in excess of marginable value of the account’s portfolio or the approved credit limit. Once you are on margin call, you will not be able to buy any more stocks, withdraw securities or cash, and you will have to pay up the margin call amount immediately, by cash deposit, deposit of additional securities collateral and/ or liquidating an appropriate amount of your portfolio (as applicable). If you fail to satisfy the call within one day, your portfolio could be partially or totally liquidated without any or any further notice. Usually, margin accounts settle in 3 business date.

Note:
Our clearing firm PENSON FINANCIAL SERVICES reserve the right to change its credit limit, margin and forced liquidation policies either generally or in any particular case without any or any prior notice.