What Works Mailbag: Real-Time Views of Margin, Ameritrade's Tracker

This week What Works takes a hiatus from mutual funds to update a few pressing issues from past columns. I'll return to funds soon to address the many terrific reader comments I received in response to last week's column about the best online brokers for mutual funds. Please keep sending your views on the subject to [e-mail], and please include your full name.

Margin Matters

Here's a rub with everyone's favorite feature that has readers frustrated: Some brokers who claim to have real-time portfolio tracking don't update investor "buying power" -- a function of margin -- in real time.

First, a brief, simplified review on margin and buying power. (Actually, first a warning: Margin is a treacherous way to invest. Do so with care, if at all.) Margin lets you buy more stock than your cash alone would cover, by letting you use stock as collateral for a loan from your broker. When you borrow money to buy stocks, you build up a "margin balance," or "debit balance." The margin balance tells you what you owe, not how much more you can borrow. The balance is an obligation to your broker and doesn't change with the value of the stocks you've purchased. ...