The primary appeal of margin is . Leverage allows an investor to control a larger position than they could afford outright.
For example, imagine you have $5,000 and buy 100 shares of a stock at $50. If the price rises to $75, you sell for $7,500, making a $2,500 profit (a 50% return). However, if you used margin to buy 200 shares ($10,000 total), that same price jump to $75 would result in a $15,000 value. After paying back the $5,000 loan, you are left with $10,000—doubling your initial $5,000 investment for a 100% return. The Risks and the "Margin Call" what does it mean to buy on margin
A margin call is a demand for you to deposit more cash or sell securities immediately to cover the shortfall. If you cannot meet the call, the broker has the right to sell your positions without your consent to recoup their loan, often at the worst possible market price. In extreme cases, you can lose more money than you originally invested. Conclusion The primary appeal of margin is