Margin trading (buying on margin)

Margin trading is borrowing money from a broker to buy more stock than your cash alone allows — amplifying both gains and losses.

Buying on margin means borrowing money from your broker, using the securities in your account as collateral, to buy more stock than your own cash would permit. The borrowed portion is leverage: if the stock rises, your percentage gain on the cash you put in is magnified; if it falls, your losses are magnified just as much, and you also pay interest on the loan.

Margin carries a distinctive danger: the margin call. If your holdings fall far enough, the broker can demand you add cash immediately or can sell your positions — often at the worst possible moment — to protect its loan. Leverage that looks attractive in a rising market can force painful, forced selling in a falling one.

stocks-llm is a research tool and neither offers margin nor encourages borrowing to invest. This definition is educational only, and margin trading is a high-risk activity best understood thoroughly before use.

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Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.