How do brokers charge interest on margin?

If I open a margin account with a broker; in what ways do they charge interest on the loan? For instance, If I borrow $5,000 and sell it the same day; do they charge the same interest as if I held the securities for a longer period? That is the only thing I dont really understand about an account on margin. If they do charge the same and I do sell the securities the same day or the next it would eat into my profit substantially! Right? This is just a hypothetical question to really understand the system. I just E-Mailed the broker im looking into the same question. I hear some brokers charge very high rates so 6% of $5,000 is very substancial for a short trade. but in a market like this It could also be Alot on a long term investment. Especially if things dont work out and my stop-loss is triggered! I need help!

if you trade on margin: lets say you buy 拢50000 of stock on 10% margin.
So you put up 拢5000 and borrow the balance of 拢45000 from the broker.
Note I'm in UK! but its gotta be similar in States.
The broker charges a financing fee of, say 2% over base. Let's say that is 8%
if you buy and sell, say 5 days later, you are borrowing 45000 x 8% for the year =拢3600= 拢3600/365 per day=拢9.86=5 x 拢9.86=拢49.32 for the 5 days.
What we do over here is buy for extended settlement. Our normal settlement is T+3 but can be extended to T+10 or more mostly without charge. Margin for stop losses varies as does margin and financing for disclosed net worth. ie. if you certify your net worth you can get better rates. See http://www.shareworld.co.uk for info and CFD trading.

First of all, 6% on $5,000 for one day is only 82 cents. The 6 percent is an annual rate. Brokers use a formula to calculate the average debit balance on which to charge interest. Margin interest is not expensive compared to most other debt.

They acrue the interest daily as needed.

Margin interest accrues daily based on the SETTLEMENT date DEBIT balance. For your example, if you are daytrading stocks they settle in 3 business days. So for instance if you have $5,000 in cash in your account and you buy a stock today for $10,000, you will have a settlement date debit balance of $5,000 in 3 days. (What makes it confusing is that all brokerage firms show you your trade date balances, not settlement date balances). If you sell $5000 worth of the stock the same day you buy it, you will not have a debit balance on settlement date (because the sell also settles in 3 days). If instead you decide to hold overnight and do not sell until tomorrow, you will accrue 1 day of margin interest -- $1.39 @ 10%. (Most firms accrue on 360 days, so take the interest % and divide by 360, then multiply by your debit balance to find out the amount that will accrue each day). Another option is to pay off the $5,000 in 3 days and again you will not have a debit balance.