The main differences between margin and cash accounts are:
Availability of funds
Day trading limits
Margin accounts with a balance of $2,000 or more (not including option positions) can trade with leverage; cash accounts can only trade with the client’s own funds.
Margin accounts with a total account equity of $2,000 or more can place short sale orders; cash accounts can only sell positions that they already own.
Margin accounts are subject to a day trading limit. For margin account with a total account equity below $25,000, investors can day trade up to 3 times within five consecutive business days; Cash accounts can day trade with settled funds.
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