What is margin trading?

When investors buy and sell securities, they can choose to pay the full amount or borrow some money from the brokerage firm. Investors who wish to borrow the money will be required to open a "Margin"  account at the brokerage firm. The brokerage firm provides loans to the investors, who can use the purchased securities or other securities deposited in the margin account as the collateral. After the investor sells the securities, he must repay the loan in accordance with the terms of the margin.

What is the difference between cash and margin trading?

Trading in margin, you only need to pay a portion of the total value of the purchased stock. Since the customer buys the stock with the loan from the brokerage firm, the stock will be used as the collateral for the loan. In the case of cash trading, the client has sufficient funds to pay for the purchased stock.

Characteristics

• Margin Investment can provide you with additional funds to achieve a substantial return on your investment.

• Provide a variety of stocks with different margin ratio that are recognized for margin trading.

• For Margin trading, you can access real-time stock prices and market information.

Why do you conduct margin trading?

In general, investors use the margin trading to increase their purchasing power and leverage to increase their investment amount. Although margin trading might give higher returns, the potential losses will be multiplied at the same time.