margin account
Leveraged brokerage arrangement
A margin account is a brokerage account that allows investors to borrow money from the broker to buy securities, using their existing holdings as collateral.
Unlike a cash account, where you can only spend what you have, a margin account lets you leverage your position: She bought twice as many shares using her margin account.
The broker charges interest on the loan and can issue a margin call—demanding additional funds if the account's value drops too far.
- leverageBorrowed capital for amplified returns
- brokerageTransaction-facilitating service
- brokerage firmCompany facilitating securities transactions
- collateralSecurity for debt
- equityImpartial treatment or ownership value
interest · interest rate · borrowing · securities · trading · day trading · maintenance · house call · call · stocks · stock market · debt · credit · loan · portfolio · risk · short-selling · speculation
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