Can an ATM withdrawal borrow from margin?

Here’s a summary of the main problem and solutions discussed in the conversation:

  • Main Problem: The user, PleasantHistorian, is unsure whether withdrawing $1,000 from a foreign ATM would draw from their margin allowance when they only have $500 in settled cash.
  • Solution 1: FidelityLinsey explained that in a margin-enabled account, withdrawals first come from the core cash position, then from money market positions, and finally from margin if necessary.
  • Solution 2: FidelityLinsey confirmed that the user can withdraw an amount up to their “Cash + borrowing on margin” balance, indicating they could withdraw more than the available cash due to their margin availability.
Here’s the full thread
PleasantHistorian
06/04/2024 at 17:41:47 PDT
If I have $500 settled cash and withdraw $1,000 at a foreign ATM will it pull the additional from my margin allowance?
FidelityLinsey
06/05/2024 at 08:57:03 PDT
Hi there, @PleasantHistorian. In a margin enabled account, your “Cash + borrowing on margin” balance shows the amount you are able to withdraw. This balance includes both the core account and other Fidelity money market funds held in the account and also the amount available to borrow generated from securities held in margin. Withdrawals will first come from your core position, followed by any money market positions held in your account. Only after these money market positions are fully depleted will margin be used. Keep in mind that when borrowing on margin, interest accrues daily, increasing your margin loan balance and decreasing equity. It is important to remember that margin requires a minimum equity of $2,000 to maintain in the account. Once margin has been added to your account, it is subject to the rules of the Federal Reserve Board, the Financial Industry Regulatory Authority (FINRA), and securities exchanges such as the New York Stock Exchange and your brokerage firm’s margin policies. Check out the link below to review all of the requirements for margin. Meeting the requirements for margin trading: https://www.fidelity.com/learning-center/trading-investing/trading/meeting-requirements-margin-trading Margin FAQs: https://www.fidelity.com/trading/faqs-margin If there is anything we can clarify or if additional questions pop up, please don’t hesitate to ask! We’re always happy to help. 🟢
PleasantHistorian
06/05/2024 at 09:13:26 PDT
Thanks for the response. Would this mean an atm would allow me to withdrawal more than the available cash since I have margin available?
FidelityLinsey
06/06/2024 at 06:57:21 PDT
Generally speaking, yes. You can withdraw the amount that shows in your “Cash + borrowing on margin” balance. 🟢

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