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Margin Account Approval 

Eligible accounts, except for retirement accounts (such as RSP's), may usually be opened as margin accounts if they meet certain criteria.

If trading from a trust account, the trust agreement must specifically state that margin trading is approved.

Once your margin account application is approved, all of your subsequent orders for marginable securities will be filled from the margin account. To cover a transaction, usually all available cash is used. Any remaining balance will be charged margin interest.

Remember that you don't have to put in any special orders to trade on margin. If you have a margin account and place an order that exceeds the amount of cash you have (and is within your margin buying power), the order will automatically go on margin. Here's an example of how this works. If you have $2000 of cash in your account, and you purchase $3000 of a marginable security, you have automatically taken out a margin loan for $1000. Your debit balance is $1,000 plus margin interest.

When changing a dollar cash account to a margin account, the account number changes from ending in "A" to ending in "E".  Please be sure to note this for your correspondence and references to your account.

Recommended further reading:
Buying Power and Excess Margin
Debit Balance and Margin Interest Rates
Margin Requirements
Margin account - diversified portfolio
The intelligent way to trade shares


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