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What is the difference between a cash account and a margin account?

A cash account is not issued any margin or short selling abilities. A margin account is issued 4:1 intraday and 2:1 overnight buying power as well as the ability to short sell securities. Margin accounts with balances less than $25,000 are limited to three (3) day trades in five (5) business days, whereas cash accounts are limited to their aggregate cash per day. Margin accounts with balances greater than $25,000 have no restriction on the number of trades placed.

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