Accounts, Brokers and Execution
14 articles
The plumbing between a decision and a position: account types, margin, how an order is routed, what protection exists and what a statement is actually telling you.
Foundations
Start here if the subject is new.Account Types
The account a security is held in changes what can be done with it, how it is taxed and who has a claim on it. It is a structural decision, not an administrative one.
Cash and Margin Accounts
A margin account borrows against the securities in it. That changes settlement, enables short selling, and introduces a lender with the right to close positions.
Buying Power
The number a platform shows as available is a calculation with several inputs, and it is not the same as the money in the account.
SIPC, FDIC and What Is Actually Protected
Account protection covers the failure of the firm holding your assets. It has never covered the possibility that an investment loses money.
Checking a Broker Before Sending Money
Registration, disciplinary history and custody arrangements are all public and take a few minutes to check. Almost every large fraud fails at the first of them.
Reading a Brokerage Statement
A statement reconciles a period. The sections that get skipped are the ones that reveal costs, corporate actions and errors.
Transferring an Account
Moving positions between firms is a standardized process that preserves holdings and cost basis. Selling and rebuying is a different thing entirely.
Fractional Shares
A fraction of a share is a position held by the broker on your behalf. It behaves like a share in most respects and differs in several that matter.
Dividend Reinvestment
Automatic reinvestment buys more of the same security with each distribution. It compounds, and it makes every distribution a purchase with tax and record-keeping consequences.
Trade Confirmations
A confirmation is the legal record of a transaction and it carries disclosures that appear nowhere else, including how your broker acted and what it was paid.
Intermediate
Assumes the foundations above.Margin Mechanics and Margin Calls
Two separate requirements govern a margined position: what is needed to open it and what is needed to keep it. A call arrives when equity falls below the second.
Order Routing and Payment for Order Flow
An order does not go to an exchange because you sent it there. It goes wherever your broker routes it, and the routing decision has a disclosed economics behind it.
How Corporate Actions Reach Your Account
Splits, spin-offs, mergers and dividends are processed by the broker on dates set by the company. What arrives, and when, follows rules that are not always obvious.
Securities Lending
Shares held in a margin account can be lent to short sellers. The holder usually keeps the economics and loses some rights while the loan is outstanding.
Frequently Asked Questions
What is the difference between a cash account and a margin account?
A cash account can only trade with money that has settled in it. A margin account lets the holder borrow from the broker against the securities held, which adds buying power, allows short selling and also adds interest costs, margin calls and the possibility of losing more than was deposited.
Read the full article: Cash and Margin AccountsDoes the pattern day trader rule still apply?
Largely no. FINRA amendments approved by the SEC in April 2026 eliminated the pattern day trader designation and its $25,000 minimum equity, effective June 4, 2026, and replaced them with intraday margin requirements on the positions an account actually holds. Brokers may phase the change in until October 20, 2027, so some accounts still follow the older rules for now.
Read the full article: Buying PowerWhat does SIPC protect?
SIPC protects customers of a failed member brokerage, restoring missing cash and securities up to $500,000, including up to $250,000 in cash. It does not protect against market losses, bad investments or fraud by a third party; it covers the case where the broker itself fails and customer assets are missing.
Read the full article: SIPC, FDIC and What Is Actually Protected