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What is Margin?

The act of “going on margin” means borrowing money from the custodian of your account, in order to purchase additional securities. Another way of saying this is that you are “leveraging” your account.

Investors who go on margin are trying to pump up gains in their account, but doing so means taking the risk of outsized losses if you are wrong. To take an account on margin is not free - the custodian will charge interest for the loan, and will essentially use the assets in your account as collateral.

What is 'Buying on Margin' and Margin Trading?
What is a Margin Call?

Keywords: stocks, leverage, securities, margin, interest,