Trading
Margin Trading
Trading with Borrowed Money
Definition
Borrowing money from your broker to buy stocks
Explanation
Margin trading lets you buy more stock than you could with just your cash by borrowing from your broker. This amplifies both gains AND losses. If your position drops too much, you'll face a "margin call"—forced to deposit more money or have your positions liquidated. Very risky for beginners.
Example
$10,000 cash + $10,000 margin = $20,000 buying power