A margin account is a brokerage account in which the broker lends the customer cash to purchase assets. When trading on margin, gains and losses are magnified.
 | | Margin Account | | A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate. Because the customer is investing with borrowed money, the customer is using leverage which will magnify profits and losses for the customer. | | Read More » | | Related to "Margin Account" | | | | Brokerage Account | | A brokerage account is an arrangement that allows an investor to deposit funds and place investment orders with a licensed brokerage firm. | | Read More » | | | Maintenance Margin | | A maintenance margin is the minimum amount of equity that must be maintained in a margin account. The NYSE and FINRA require investors to keep at least 25% of the total value of their securities in a margin account. | | Read More » | | | Margin Call | | A margin call is a broker's demand of an investor who is using margin to deposit additional money so that the margin account is brought up to the maintenance margin requirement. | | Read More » | | | Buying Power | | Buying power is the money an investor has available to buy securities. It equals the total cash held in the brokerage account plus all available margin. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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