Margin Trading At A Glance

Margin trading, commonly known as buying on margin, means borrowing money from a broker to purchase stocks

Although margin trading magnifies profits, it comes with a lot of risks. One of the risks of margin trading is being forced to lock in losses

There are things you to know about margin trading

A collateral, As it is with traditional loans, you’ll need collateral to take loans from a broker

A credit limit is an amount an investor can borrow, and it depends on the value of stock about to be purchased

Traditional loans come with interests, the same with merging trading