What are the advantages of having a trading account as a cash account instead of a margin account?

The advantages of a cash account include:

1. No borrowing funds: In a cash account, you only trade securities that you have fully paid for with your available cash balance, so you won't be able to use leverage or borrow money from the broker.
2. No shorting: You cannot sell securities short or engage in margin trading, which limits your investment options but also mitigates the potential risks associated with leverage.
3. No margin interest: Since you are not using borrowed funds, you won't be charged interest on your margin position, which can save you money on interest costs.
4. Simplified tax reporting: With a cash account, your tax reporting will be simpler, as you won't have to report capital gains from selling securities short or report the interest you paid on borrowed funds.
5. Lower account maintenance requirements: Cash accounts typically have lower minimum balance requirements compared to margin accounts, which can be advantageous if you prefer to keep your account low-maintenance.

However, it's important to note that cash accounts have limitations in terms of the number of shares you can trade and the amount of buying power you have. If you want to trade a large number of shares or have a high buying power, a margin account may be more suitable.