The Margin Lending Program (margin) provides an extension of credit based on eligible securities used as collateral from your qualified Merrill accounts. Margin offers a source of liquidity with competitive rates that allows for timely market investments, diversification, stock option financing or short selling.
Interest expenses associated with your Margin borrowing may be tax-deductible, up to net investment income earned in the account. Margin interest expenses may also be exempt from the Alternative Minimum Tax (AMT). Merrill does not provide tax advice, so please consult your tax advisor for tax advice about margin interest deductibility.
Talk to your Merrill advisor to see if Margin can help you tap into the value of your investments and support your larger financial strategy.
Margin is not appropriate for all investors. Borrowing on margin and using securities as collateral involve certain risks. When considering a margin loan, you should take into account your individual requirements, portfolio composition and risk tolerance, as well as capital gains taxes, portfolio performance expectations and investment time horizon. Please be aware that:
Before opening a margin account, you should carefully review the terms governing margin loans. For Individual Investor Accounts, these terms are contained in the Margin Lending Program Client Agreement. For all other accounts, the terms are in your account agreement and disclosures. It is important that you fully understand the risks involved in using margin. These risks include the following:
Carefully choosing the quality of your investments you borrow against and the amount you borrow can help reduce the likelihood of a maintenance call. Risk management strategies to consider include:
Whether you’re defining goals, addressing change or figuring out how to move forward, Merrill and Bank of America offer a wide range of solutions to help you take the next step and stay on track.
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Diversification does not ensure a profit or protect against loss in declining markets.
1 Merrill does not provide tax advice. Consult your tax advisor for tax advice about margin interest deductibility.
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