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