What Does Buying On Margin Mean -

is a trading technique where you borrow money from a brokerage to purchase securities, using the investments in your account as collateral. This process provides leverage , allowing you to control a much larger position than you could with your own cash alone. How Buying on Margin Works

: Because you are taking out a loan, the broker will charge you daily interest on the borrowed amount. The Impact of Leverage (Example) what does buying on margin mean

: The Federal Reserve (under Regulation T) generally requires you to fund at least 50% of a security's purchase price yourself. is a trading technique where you borrow money

: Once you hold the security, you must maintain a minimum level of equity (often around 25%–30% ). The Impact of Leverage (Example) : The Federal

To trade on margin, you must first open a specific with your broker, which requires higher approval standards than a standard cash account.

Leverage amplifies both your potential gains and your potential losses. What is Buying on Margin? | Desjardins Online Brokerage