What margin means in stock trading

[Trexxxy]

Margin

A margin account allows an individual to acquire cash (apply for a line of credit, basically) from a representative to buy a venture. The contrast between the measure of the advance and the cost of the protections is known as the margin.

Exchanging on margin can be risky because, in case you're off-base about the bearing in which the stock will go, you can lose huge money. You should regularly keep a base equilibrium in a margin account

 

[Kayzzy3]

Margin

A margin account allows an individual to acquire cash (apply for a line of credit, basically) from a representative to buy a venture. The contrast between the measure of the advance and the cost of the protections is known as the margin.

Exchanging on margin can be risky because, in case you're off-base about the bearing in which the stock will go, you can lose huge money. You should regularly keep a base equilibrium in a margin account

Margin is very important in stock trading because as we know it stock is traded with very huge amount of money, but margin gives micro traders leverage to trade on a big market, making 8t possible to open trade with as low as $1 or even less.

And yes you are right to say that traders may lose big amount if they miss it on the margin aspect. That is why it is important to go through the crucible of forex trading before you engage.

 

[Oliver 20]

Purchasing on margin is acquiring cash from a specialist to buy stock. You can consider it an advance from your financier. Margin trading permits you to purchase more stock than you'd have the option to regularly. To trade on margin, you need a margin account.

 

[arrain3786]

Margin trading is a facility under which you buy stocks that you can't afford. You are allowed to buy stocks by paying a marginal amount of the actual value. ... Margin trading can be considered leveraging positions in the market either with cash or security by investors. Your broker funds your margin trading transactions

 

[Chris]

Margin is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor's account and the loan amount from the broker. Buying on margin is the act of borrowing money to buy securities.
It also increases your purchasing power and allows you to use someone's else money to increase financial leverage.

 

[Kiko]

In the stock market, margin trading refers to the process whereby individual investors buy more stocks than they can afford to. Margin trading also refers to intraday trading in India and various stock brokers provide this service. Margin trading involves buying and selling of securities in one single session. Over time, various brokerages have relaxed the approach on time duration. The process is fairly simple. A margin account provides you the resources to buy more quantities of a stock than you can afford at any point of time.

 

[Chumzy]

I don't know so much about stock trading and I hope to learn. But from my foundational knowledge I can try to give an opinion on what it is. I think it is the profit figure in a stock bought or the profit percentage or ration hoped to get.

 

[Sunnytee]

Buying on margin is borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you'd be able to normally. To trade on margin, you need a margin account.

 

[Alexandoy]

Pardon me for this comment if this is straying from the topic. This is the first time that I've heard of the margin account in trading. But I've heard of that account in the casino. A casino broker will provide a margin account to the casino player which means the casino player can play without bringing in money. When he wins then he gets the winning and if he loses then he pays the broker with a check. I guess that is the same mechanics that trader are doing.

 

[Suba]

Margin account is by borrowing money from a broker to buy shares, with a guarantee of account assets. So the margin account will really help traders to get additional capital. Example: If a trader is going to buy ABCD shares at $ 100 per share, but he only has $ 50 in cash, if he uses the margin account then he gets a loan from the broker for $ 50 and buys ABCD Shares. After that the trader sells the stock at a price of $ 150, so the trader will get a profit after deducting the initial capital ($ 50) minus the loan ($ 50) and deducting interest. But if ABCD's share price drops to $ 90 then the trader still has to pay the loan (50) plus interest. If the ABCD share price drops drastically, the trader will get a margin call, that is, the trader must provide sufficient cash or equity to pay for the margin loan, or the broker will sell the shares bought or owned by the investor.

 

[Blue house]

Margin is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor's account and the loan amount from the broker. Buying on margin is the act of borrowing money to buy securities. The practice includes buying an asset where the buyer pays only a percentage of the asset's value and borrows the rest from the bank or broker. The broker acts as a lender and the securities in the investor's account act as collateral.

 

[Debola]

Margin

A margin account allows an individual to acquire cash (apply for a line of credit, basically) from a representative to buy a venture. The contrast between the measure of the advance and the cost of the protections is known as the margin.

Exchanging on margin can be risky because, in case you're off-base about the bearing in which the stock will go, you can lose huge money. You should regularly keep a base equilibrium in a margin account

Buying on margin is borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you'd be able to normally. To trade on margin, you need a margin account.

 

[Akinwale701]

Margin

A margin account allows an individual to acquire cash (apply for a line of credit, basically) from a representative to buy a venture. The contrast between the measure of the advance and the cost of the protections is known as the margin.

Exchanging on margin can be risky because, in case you're off-base about the bearing in which the stock will go, you can lose huge money. You should regularly keep a base equilibrium in a margin account

Thank you very much for how you have explained this to us in a simple and easy to understand term like this. I was initially thinking you were talking about the margin and Mark up used in accounting rations lol. Not until I dived into the explanation and understand it better.

 

[Mawome]

Exactly I think I totally understand what margin mean from the above explanations, thank you very much the house members. Margin account helps you to borrow money from broker, that's interesting, but is the margin account different from your stock account?

 

[tyrim88]

Margin is what investors usually do to get in on a leverage position when the money he has cannot purchase the required quantity of stock he wants to.He borrowed money from a broker and buy stock,he will have to invest a substancial amount for the said stock and get the rest from a broker.

 

[Bousine123]

Thanks for the tip my friend. The stock market really operates differently from how the forex market operates.the spread has a totally different meaning.

 

[ahmedo24]

Thanks to you guys for your contributions on this margin trading stuff, I have learnt a lot . My question is that how long does this borrowing last ? What is the market went after the margin how is that resolved.

 

[GIFTMICHAEL]

Firex, crypto, stocks etc, use margin to calculate for tje total amount one is using to venture into trading. It can be liquidated if the person doesn't utilize his wisdom well.

 

[Nurudeen]

Margin is a good opportunity to make some good amount of money with either stock trading or crypto currency exchange Business. However, it's also very risky to use it also

 

[Hojo]

Margin is not really good as a newbie without training or mentor , you will just end up owing if you can't reach the limit