USA HISTORY

Detailed explanation-1: -Buying on margin involves getting a loan from your brokerage and using the money from the loan to invest in more securities than you can buy with your available cash. Through margin buying, investors can amplify their returns-but only if their investments outperform the cost of the loan itself.

Detailed explanation-2: -The Securities and Exchange Commission has set up a system which brokers use to offer credit to buy stocks. This system is referred to buying stocks on margin or buying through a margin account.

Detailed explanation-3: -Such funds are called a margin loan, and you can use them to buy additional securities or even for short-term needs not related to investing. Each brokerage firm can define, within certain guidelines, which stocks, bonds, and mutual funds are marginable.

Detailed explanation-4: -Example of buying on margin If the broker sets an initial margin of 50% for one lot position $100 AAPL, then the investor needs 50% times $100 per share times 100 shares per lot, or a margin of $5000 on his portfolio to purchase one standard lot position.