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Margin is the money borrowed from a brokerage firm to purchase an investment
The margin, when used, comes with interest
That means that you have to pay back more than the principal borrowed.
This magnifies losses because the debt to be paid is collateral plus the interest
Margin Call: A demand from your brokerage for you to add money to your account or close out positions to bring your account back to the required level if you owe money.
Margin is typically used for short-term investments.
Why I don’t use margin
Highly speculative. There’s more than enough money to be made without such a risk.
Using margin usually on hopes for large profit, though there are professionals who speculate with a strategy on margins
I’m not averse to risk, but I’d rather risk on my own line than someone else’s
Major Key:
If you can’t make money with what you have, then you sure as h*ll can’t make money with more money