Plain-English definitions, reviewed by an independent investor
Trading on Margin
Margin is borrowing from your broker to buy more than your cash allows, amplifying both gains and losses.
Margin is borrowing from your broker to buy more than your cash allows, amplifying both gains and losses.
Buying Power = Cash × (1 ÷ Margin Requirement)
Why it matters
It lets small accounts take bigger positions.
Common confusion
A drop can trigger a margin call forcing sales at the worst time; losses exceed deposits.
Frequently Asked Questions
What is a margin call?
When your equity falls below the required minimum, the broker demands cash or sells.
Is margin for beginners?
Usually not; the downside is magnified and can end the account.