Are margin interest rates low at MEXEM?

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Are margin rates low at MEXEM?

Margin trading - borrowing money from your broker to buy more assets than you could otherwise afford - is popular, but it's not available at all brokers, and margin interest rates can vary widely.

MEXEM offers margin trading, but its margin rates are high, so you should look elsewhere. Start with our picks for the best margin trading platforms, or read on for info on margin trading.

I don't recommend MEXEM for margin trading

Krisztián Gátonyi

Forex • Market Analysis • Stock Market

I've thoroughly tested MEXEM's services using real money. When it came to margin trading, high margin rates killed the deal for me:

MEXEM's margin rates are high, which can erode your trading profits.
Stock and ETF trading fees at MEXEM are low.
Margin trading involves borrowing money from your broker to increase your exposure.
Into margin trading? Skip MEXEM and check the best margin trading platforms.

Before we begin, let's see if MEXEM is available in your country:

No, you can't open an account at MEXEM if you live in the United States!

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MEXEM

3.9/5

Minimum deposit

Stock fee

Low

Options fee

High

Inactivity fee

Account opening

1 day

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MEXEM margin rates are high

So what are margin rates? Margin rates, sometimes called debit rates, refer to the interest rates charged by brokers when you borrow money to buy and sell stocks, ETFs (exchange-traded funds) or options on margin.

Each brokerage sets its own margin rates, but generally margin rates are closely tied to the benchmark interest rate of the currency in which you borrow. If your broker lends you USD, the margin rate will most often be the US interest rate plus a markup that the broker adds.

Brokers often have a tiered system for margin rates, depending on the amount you borrow: the more money the broker lends you, the lower the margin rate is. Some brokers also charge different margin rates for different types of trading accounts. Typically, a standard account will have higher rates than a premium account. The rates BrokerChooser quotes refer to standard accounts.

Most brokers calculate the margin rate on a daily basis, but the amount you owe them is charged to your account once a month. Brokers are required to disclose their margin rates; some do so citing an annual percentage rate while others will display it in swap points. Whichever it is, just keep in mind that margin rates can change rapidly without advance warning from your broker.

Margin rates at MEXEM
Broker	USD margin rate	USD margin rate class
MEXEM	15.3%	High
Saxo	-
DEGIRO	6.9%	Low

Margin rates on short selling

Margin rates can also apply when you engage in short selling. Short selling means that you borrow shares from your broker and sell them with the expectation that the share price will decline. You will then repurchase the shares at a lower price, return them to the broker and pocket the price difference as your profit.

The margin rate for short selling is the interest rate charged by the broker on the borrowed funds used to facilitate the short sale. It is similar to the margin rates for simple stock, ETF or options trading.

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Stock trading fees are low

Margin rates are the single most important item that influences your margin trading profits, but trading fees and other regular or one-off charges can also impact your overall trading costs.

MEXEM has low stock and ETF trading fees overall. See details of this and other fees charged by MEXEM and some close competitors in the table below. (Trading fees cited here refer to a $2,000 trade.)

Stock trading fees and other charges at MEXEM
Broker	US stock fee	UK stock
MEXEM	$1.0	$3.2
Saxo	$1.6	$3.8
DEGIRO	$2.1	$3.5

Trading on margin

Trading on margin means borrowing money from your broker to buy stocks, ETFs or options. But why would you do that? Basically, it increases your 'buying power', allowing you to open larger trading positions than you could otherwise afford with just the cash in your brokerage account.

In order to trade on margin, you'll need to open a special account at your broker, typically simply called a margin account. You are also required to deposit a certain percentage of the total traded value as collateral, also known as the margin requirement. The remaining portion is funded by the broker.

Make sure you check the margin rates your broker applies, as higher rates can significantly impact your overall trading cost and erode your investment gains. For example, you may be happy with a simple stock investment that yields an 8% return over one year; probably less so if you borrowed money at 10% annual interest to finance that stock investment.

You also need to be aware of the risks associated with trading on margin, as any losses will also be magnified in the same way that gains are amplified.

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MEXEM margin rates