Read Your Margin Agreement:
As with any type of business transaction that you are contemplating, it is important for you to read and understand fully all of the terms and conditions of any type of margin or, for that matter, loan agreement which you are considering. The explanation of the account executive of the terms, risks and rewards of what is contained in the margin agreement is superseded by the document itself. Moreover, the agreement will refer the reader to other rules and regulations that are incorporate, by reference, into the document. These rules and regulations are of equal force with the terms of the margin agreement.
It is for these reasons that a customer is required to sign the margin agreement to open a margin account. The agreement may be part of your account opening agreement or may be a separate agreement. The margin agreement states that you must abide by the rules of the Federal Reserve Board, the New York Stock Exchange, the National Association of Securities Dealers, Inc., and the firm where you have set up your margin account.