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.

Related

interest · interest rate · borrowing · securities · trading · day trading · maintenance · house call · call · stocks · stock market · debt · credit · loan · portfolio · risk · short-selling · speculation

Opposites
funding source for trades

margin accountcash account

Record of liquid funds

retirement account · savings account · money market account

Family

margin, account, margins, marginal, marginally, marginalia, marginalize, marginalized, marginalization

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Top 500,000
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