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Tip of the Day Don't try to Pick Stocks

Don't try to Pick Stocks - Some of us when we have extra money think that we can invest it in the stock market and earn some returns on...

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Margin

Definition: The use of borrowed money from a brokerage house to purchase securities.  Referred to as "buying on margin."

TeenAnalyst Advice: Most margin accounts give an investor a 50% margin.  What that means is that they can buy $20,000 worth of stock for only $10,000 of their own money.  They're charged an interest on the money they borrow.

This increases the risk an investor faces when investing.  If the stock drops a certain percentage amount, you'll get a "margin call" from the broker.  They will either make you put more money in your account or entirely liquidate your position.

Most margin accounts require you to have a minimum of $10,000.

 

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There are some terms which are very difficult to understand in specific limitations. I am glad to see here the definition of Margin in the terms of market which enhance my knowledge about commerce.

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