To buy on margin, you must open a specific , which is different from a standard cash account.
: The percentage of the purchase price you must pay with your own cash. Under Regulation T , this is typically 50% for stocks. what is buying on margin
Margin magnifies the percentage move of your personal investment. Cash Only ($10k) On Margin ($10k Cash + $10k Loan) $2,000 profit (20% return) $4,000 profit (40% return)* Stock Falls 20% $2,000 loss (20% loss) $4,000 loss (40% loss)* *Before interest and fees ⚠️ Key Risks to Know To buy on margin, you must open a
: The minimum amount of equity you must keep in your account at all times. This is often around 25% of the total market value of the securities. To buy on margin