Change Account Type
Learn here how to change the account type and understand the differences between a cash account and a margin account.
Trading on margin is intended for experienced investors with a high risk tolerance, as you may lose more than your initial investment.
Login
- Open your browser and visit the Client Portal website
- Enter your username and your password
- Authenticate yourself via two-factor authentication
Account type selection
In the menu at the top right corner, select Welcome and then Settings.
In the Account Configuration section click Account Type. On Configure Account Type page select Margin from the dropdown menu on the next page.
Confirm by clicking Continue.
Confirm your selection
Now indicate your previous experience for trading on margin.
On the following pages, you have to confirm the margin agreement. To do this, type your name as it appears on the left side of the page. Then click on Continue.
If you meet the minimum requirements for a margin account, the account type change should typically be completed within 2 business days.
The instruction above is about upgrading a cash account to a margin account. If you wish to downgrade to a cash account, please refer to the FAQ section at the bottom of this page, titled: Can I downgrade my margin account to a cash account?
Differences between cash and margin account
The following table shows the basic differences between a cash and margin account:
Margin account
Suitable for:
Cash account
Suitable for:
- Stocks and ETFs
- Options
- Warrants
- Certificates
- Futures
- Forex
- Stocks and ETFs
- Long options and covered short options
- Certificates
- Currency exchange
Margin account characteristics:
Cash account characteristics:
- Minimum age requirement: 21 years
- All available products can be traded with a margin account
- Short selling of stocks is possible
- Stock options, index options, and futures options can be bought and sold
- Trading of option combinations is possible
- Day trading without restrictions is possible
- Easy access to margin credit is possible
- Sales proceeds are immediately available, allowing for immediate reinvestment
- Activation of the Stock Yield Enhancement Program possible
- Switching to a cash account is possible at any time
- Minimum Account Value: 2000 EUR
- Minimum age requirement: 18 years
- Not all products can be traded with a cash account
- Short selling of stocks is not possible
- Stock options and index options can be bought and sold
- Option combinations are not available
- Day trading is restricted
- No margin credit available
- Sales proceeds are available up to 3 days after the sale and can only be reinvested then
- Minimum equity required to activate the Stock Yield Enhancement Program
- Switching to a margin account is possible at any time
- Minimum Account Value: 0 EUR
While the account type change is being reviewed, you will not be able to make any adjustments to your trading permissions.
Pros and cons of a margin account
- A margin account provides the ability to invest in leveraged products such as turbos, sprinters and speeders.*
- The use of margin allows investors to achieve results even with less volatile products.*
- A margin account allows investors to sell (write) options.*
- A margin account allows investors to go short on stocks.*
- Investors can trade futures with a margin account.*
- In margin trading, both profits and losses are magnified, meaning you can lose more than your personal investment.
- Failure to meet maintenance margin can result in forced liquidations of positions in your investment portfolio.
- Like borrowing money, trading on margin is not without cost. You pay debit interest on the borrowed amount.
- Using leverage can increase the complexity of managing your investment portfolio.
- Your loss may be greater than your deposit.
* Provided that your account balance and trading experience allow for this.
FAQ
If the financial information and trading experience you provide meet the minimum requirements for a margin account, the account type change should be completed within 2 business days.
With a cash account, you can buy options and sell covered option, provided you have the underlying of the option in your portfolio or enough cash available. A few simple option combinations can also be traded within a cash account.
With a margin account you can sell uncovered options and implement flexible option strategies.
To be eligible for a margin account, you need to meet the following criteria:
- Age Requirement: You must be at least 21 years old.
- Account Value: Your account value (net liquidation value) should be a minimum of 2,000 EUR. If it falls below this threshold, your account will automatically function as a cash account.
If the financial information and trading experience you provide meet the minimum requirements for a margin account, the margin account may be approved. Please note that our partner, Interactive Brokers, does not publish specific information on these minimum requirements, and they may be subject to updates.
You can check for this in the Settings under Account Type in the Client Portal. Alternatively, check the buying power in the trading platforms. If it is larger than your available balance, you have a margin account.
Yes. If you wish to downgrade your margin account to a cash account, please follow the instructions on this page and on Configure Account Type page select Cash account type instead of Margin.
However, there are some important considerations to keep in mind following the downgrade:
- Negative excess liquidity: If you have negative excess liquidity, you can either close the position or execute an FX conversion
- Position violations: Ensure you close positions that are not allowed in a cash account, such as short positions.
- Negative currency violations: You cannot have any negative cash balances when requesting the downgrade to a cash account. To address this, purchase the currency in forex markets or close positions in that currency.
If you meet these requirements, the account type change should be completed within 2 business days upon your request.
If you wish to free up more available liquidity to protect yourself from further future declines, there are several actions you can take:
- You can transfer funds to your trading account. To do this, you can use the deposit instructions.
- You can execute an order that lowers your current margin requirements. In most cases this means you can close or reduce a current open position. You can perform an internal transfer from other accounts linked to your securities account to increase your Portfolio Value and Excess Liquidity.
- In TWS you can right-click on a position in your portfolio and subsequently select the “Set Liquidate Last” parameter. If you can’t see this parameter, you can look it up via the search bar on top of the pop-up menu.
If possible, the system will try to protect these positions when a liquidation occurs on your account. However, there is no guarantee that these position(s) will also effectively not be liquidated earlier by the system.
Disclaimer:
The author’s remuneration is not directly or indirectly related to his/her viewpoints or ideas.
Neither do any other conflicts of interest apply in accordance with the policy around the conflicts of interests of LYNX.
The information on this webpage is neither considered as investment advice nor an investment recommendation. The page shows data that has been prepared by LYNX as general information / marketing information for private use by investors but is not intended as a personal recommendation of particular financial instruments or strategies and does not take into account the individual investor’s particular financial situation, investment knowledge and experience, investment objectives and horizon, or risk profile and preference.
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