Margin Accounts

About Margin

Margin is a convenient source of liquidity to pursue investment opportunities or to meet other personal or business financing goals.

Margin is a loan from Wells Fargo Advisors collateralized by eligible stocks, mutual funds, bonds, and other securities in your Wells Fargo Advisors brokerage account. You can use margin to finance securities purchases or to borrow against securities already held in your account. You must deposit at least $2,000 in cash or generally twice that in fully-paid eligible securities to open a margin account. 

What you should know before you use margin

It's important to note that trading on margin involves risk. Before opening a margin account, you should understand the account requirements and risks. Learn more by reading our Margin Disclosure Statement.

Setting up a Margin Account at Wells Fargo Advisors

To open a new brokerage account and request a margin loan, call this toll-free number to open by phone 866-243-0931.

Looking for answers about margin accounts? Let us help, whether you need a definition of a margin call or want to understand their implications of buying stocks on margin.

Margin can be used for a wide variety of needs

When used prudently, margin borrowing can be an alternative to other credit products and can be used to meet a wide variety of liquidity and capital needs including:

• Unplanned expenses
• Real estate
• Debt consolidation
• Education financing
• Business financing
• Taxes

For investment purposes

• Timely market investments
• Diversification
• Stock option financing
• Short sales

Use alongside Wells Fargo Advisors Brokerage Cash Services Program

• Overdraft protection
• Accessed automatically via debit cards, checks, online access, ACH, or wire transfers

Setting up a Margin Account at Wells Fargo Advisors

To open a new brokerage account and request a margin loan, call this toll-free number to open by phone 866-243-0931.

Looking for answers about margin accounts? Let us help, whether you need a definition of a margin call or want to understand their implications of buying stocks on margin.

Potential benefits of borrowing instead of selling securities

Using margin as a source of funds may provide potential benefits:

• Allows you to remain invested in the market so you don’t forego potential market gains
• Avoids triggering capital gains and associated taxes that may result if you sell appreciated securities
• May give you more control over when to sell securities
• Avoids transaction costs often associated with selling and buying securities (you will be charged interest on any margin loans)
• Provides flexibility to reinvest when market conditions are favorable 

Potential risks of borrowing instead of selling securities

Some of the risks and considerations include, but are not limited to, the following:

• Your account is subject to market risk . The value of individual securities and mutual funds backing your margin loan may increase or decrease in response to market fluctuations, the prospects of individual companies or industry sectors, interest rates, and general economic conditions.
• You can lose more money than you deposit in a margin account . If the value of your securities declines to less than the margin debit balance, you will be responsible for any shortfall plus accrued interest.
• Wells Fargo Advisors can change our margin requirements without prior notice . This means the amount of account equity you are required to maintain can increase, and/or the amount you can borrow can decrease, for certain or all securities.
• You are responsible for meeting margin calls . You are required to have sufficient equity in your account on or before the settlement date to cover securities purchases. Also, a decline in the value of securities or increase in margin requirements may result in a maintenance call and require you to deposit cash or additional securities into your margin account.
• Wells Fargo Advisors can force the sale of securities in your account(s) . If you do not meet a maintenance or Fed call , Wells Fargo Advisors can sell all or some of your securities to meet the call.
• The sale of securities can create tax liabilities . If low cost-basis securities are sold to meet a margin call, capital gains liability could be created.
• Wells Fargo Advisors can sell your securities or other assets without contacting you . Wells Fargo Advisors will attempt to notify you of margin calls, but we are not required to do so. Even if we have contacted you and provided a specific date by which you must meet a margin call, we can still take necessary steps to protect our financial interests, including immediately selling the securities, without notice to you. This is especially true during times of volatile financial markets.
• You are not entitled to choose which securities in your account(s) are liquidated to meet a margin call . Because the securities are collateral for the margin loan, Wells Fargo Advisors reserves the right to decide which security to sell in order to protect our interests.
• Margin accounts are susceptible to interest-rate risks . Rising interest rates can cause your margin interest rate to increase without notice.
• The cost of borrowing can exceed your returns . There are no guarantees that the returns on your securities and securities account will exceed your margin borrowing costs. If the cost of the margin loan is greater than your returns, this is known as a “negative cost of carry.”

Setting up a Margin Account at Wells Fargo Advisors

To open a new brokerage account and request a margin loan, call this toll-free number to open by phone 866-243-0931.

Looking for answers about margin accounts? Let us help, whether you need a definition of a margin call or want to understand their implications of buying stocks on margin.

Margin Rates at Wells Fargo Advisors

As with other loans, interest will be charged on the outstanding balance of your margin loan. At Wells Fargo Advisors, the interest rate charged depends on the amount borrowed, as summarized below. An adjuster is applied to the rate based on household assets under management.

WSJ Prime Rate (as of July 27, 2023) = 8.50%

Interest is calculated using the Wall Street Journal Prime Rate, with a floor rate of 0% per annum, without regard to any fluctuations in the WSJ Prime Rate that may cause the interest rate to be less than 0%. Your actual rate of interest may change in the future, however, without prior notice to you.

For the WSJ Prime Rate please visit: wsj.com/market-data/bonds/moneyrates

Setting up a Margin Account at Wells Fargo Advisors

To open a new brokerage account and request a margin loan, call this toll-free number to open by phone 866-243-0931.

Looking for answers about margin accounts? Let us help, whether you need a definition of a margin call or want to understand their implications of buying stocks on margin.