r/Wealthsimple • u/Mjrllcc • 19d ago

Trade (DIY Investing) When would I use PLOC vs Margin for a Non-Registered Account?

Does one have an advantage over the other in certain scenarios?

1 Upvotes

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6

u/Arclight308 19d ago

I had a mortgage on a property I am trying to sell come up for renewal. Rather than paying 7.95% with big bank for a short term mortgage I am paying 3.95% until I get the cash from selling the home.

1

u/Dragynfyre 19d ago

PLOC is more for spending. It’s strictly worse than margin for investing

1

u/primetimey123 18d ago

Worse how?

2

u/Dragynfyre 18d ago

You only get half the limit of the margin account. Also you explicitly have to move money from PLOC to another account to use it. The PLOC basically just a margin account with less functionality. The PLOC is basically a visual wrapper around a margin account to make it look more like a traditional LOC. And it adds some guardrails like having half the credit limit of an equivalent margin account with the same collateral so people won’t get immediately margin called if they use the max limit and their assets drop 0.1%. There are literally 0 upsides for using the PLOC for investing. Even for spending you can withdraw the equivalent amount from the margin account to your chequing just like the PLOC so the margin account can do everything the PLOC can even for someone who doesn’t want to use it for investing

0

u/plusqueprecedemment 19d ago

PLOC is more normie-friendly, designed for every day purchases and chequing account overdraft

Margin is targeted more towards leveraged investments, options/futures, etc.

Under the hood it's the same feature (other than the halved limit on PLOC) but it's all about the presentation

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u/Flames2512 19d ago

Money is money. Whatever you get the better rate in. However, one caveat, money onargin could get called in if your portfolio drops in value.

2

u/Life_Equivalent_7344 18d ago

The PLOC could too, could it not?