For investors looking to advance their portfolios, margin trading presents an opportunity to significantly enhance buying power through borrowed funds based on existing cash and equities. This strategy, while amplifying both rewards and risks, can be particularly advantageous when executed on a robust platform like Axos Invest. Axos Bank's recent inclusion in the 2024 Forbes America's Best Banks list further underscores its reliability in what has been a challenging year for financial institutions.
One of the primary benefits of a margin trading account with Axos Invest is low-cost, flexible interest rates. Transparency in these rates is essential for investors to avoid surprises, and Axos Invest excels in this area by offering clear, published rates on their website. The platform's standard rates are aligned with debit balances, meaning higher balances benefit from lower rates. Additionally, Axos offers an Elite program that provides qualifying members with even lower margin rates.
Flexibility is another significant advantage. With a margin account, investors only need to deposit the amount they wish to invest in a stock or ETF as collateral, with the broker fronting the rest as a loan. At Axos Invest, investors can borrow up to 50% of their eligible equity, allowing for increased buying power and the ability to capitalize on market opportunities swiftly. Borrowed funds are available within 24 hours, and mutual funds held for at least 30 days can also be used to enhance borrowing capacity.
Margin accounts at Axos Invest also open the door to options trading, a feature that caters to more sophisticated investors. Options trading on margin allows for the implementation of complex strategies that come with higher risks. Axos Invest supports this by offering a 20% discount to Elite members upon approval for options trading.
Diversifying a portfolio is crucial for minimizing risk, and margin trading facilitates this by enabling investors to explore a broader range of securities without having to sell their existing holdings. By leveraging borrowed funds, investors can achieve a more balanced and resilient portfolio.
Another noteworthy benefit is the ease of accessing loans. Once approved for a margin account, investors can seamlessly transfer funds between Axos accounts without the hassle of additional paperwork. This feature is particularly useful for those needing quick access to cash.
For novice investors, the idea of margin trading might seem daunting. However, Axos Invest provides robust customer support with a team of licensed relationship managers available at no cost. This support is critical for both new and experienced investors navigating the complexities of margin trading.
In summary, an Axos Invest margin trading account offers numerous benefits, including low-cost rates, flexibility, advanced trading options, portfolio diversification, easy access to loans, and comprehensive customer support. These features make it a compelling choice for investors aiming to elevate their investment strategies and potentially maximize their returns.
