How margin interest is charged

A margin loan is the debit balance in your account: the amount you have borrowed from your broker to hold positions worth more than your own equity. Interest accrues on that balance every calendar day, weekends included, and at many brokers it is added to the debit monthly. The daily charge is the annual rate divided by the broker's day-count basis, applied to the balance.

Brokers set margin rates from a base rate of their own plus or minus a spread that usually shrinks as the balance grows. When benchmark rates change, the base rate tends to follow, and because margin loans are variable-rate, the new rate applies to the whole existing debit. The page on how rate changes reach margin interest walks through that in more detail.

Why the break-even move matters

The last figure is the percentage the whole position has to gain over the holding period just to pay the interest. On a short swing trade it is small. On a leveraged position held for months it can take a real share of the expected gain, and it keeps growing for as long as the trade stays open, whether the position is working or not.

Margin also brings maintenance requirements and the risk of a forced sale. See margin call and buying power before borrowing to trade.