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Margin Loans Costs of Brokerage with Margin Loans

Discussion in 'Finance & Banking' started by Ol School Skata, 11th Nov, 2005.

  1. Ol School Skata

    Ol School Skata Well-Known Member

    Joined:
    7th Nov, 2005
    Posts:
    71
    I was a little shocked today to find out the costs for brokerage if i apply for a margin loan.

    I use comsec as my broker - online trades, and was going to organise a Margin loan with Leveraged Equities.

    Comsec have told me it is possible to do but my trades will now be approx $80 instead of the $19.95. They have suggested to use their own product where the brokerage will not change but the LE product will allow more flexibility - i was wanting to write put options on stocks with my cash and margin lending cash as collateral...but this takes some of the gloss off. Comsec products do not allow this type of trading to occur.

    Could some others share their brokerage costs when involving margin lending? Are their any other options available?


    OSS
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

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    10th Jun, 2005
    Posts:
    1,172
    I encountered the same problem with commsec as sponsoring broker and BT as margin lender.

    N.
     
  3. Ol School Skata

    Ol School Skata Well-Known Member

    Joined:
    7th Nov, 2005
    Posts:
    71
    And what did you do or how did you overcome it? Change broker, change margin lender, both or nothing?

    OSS
     
  4. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    trade infrequently and in big parcels...

    What you could do though I suppose is to draw cash advances under your margin loan and use those funds to buy shares through your ordinary commsec account. Relatively expensive money I guess at over 8% typically, but better than say a personal loan.

    Of course you'll be increasing your margin loan without providing your margin lender with additional security...so you will need to keep an eye on your LVR so that it stays at a manageable level.

    Cheers
    N.
     
  5. perky

    perky Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    300
    Location:
    Sydney
    Best thing to do is have Westpac as your broker (if you have a BT Margin Loan) - this is what I have done. Get them linked (as Westpac and BT are in partnership). Westpac charges $24.95 per trade. You also have the advantage of being able to use the margin loan to borrow against for shares - eg WBC shares are 75% lend, BSL are 70% etc..
    Keep your comsec logon though - comsec has far better free features on their site than Westpac broking when it comes to charting, research etc...