Buying On Margin at Buying

Buying On Margin. In the most basic definition, margin trading occurs when an investor borrows money to pay for stocks. Buying on margin occurs when an investor buys an asset by borrowing the balance from a bank or broker.

Buying on margin allows an investor to borrow money to purchase securities. Purchasing an asset using borrowed money is known as buying on margin. Buying on margin is something that most day traders enjoy because it gives them the opportunity to supercharge their returns.

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Let's say you deposit $10,000 in your margin account. Buying on margin is the purchase of an asset by paying the margin and borrowing the balance from a bank or broker. For example, a margin account with 20x leverage can trade securities up to 20 times the value of the equity in that account. Buying on margin refers to the initial payment made to the broker for the asset;