Margin trading basics

Margin lets you borrow from your broker to buy more stock than your cash balance alone would allow. Regulation T allows initial margin of up to 50% of a security's purchase price.

Your broker sets maintenance margin requirements — typically 25–30% equity in your account. If your equity falls below this level, you'll receive a margin call and must deposit funds or close positions.

Margin amplifies both gains and losses. A 2× leveraged position doubles your profit on a 10% move, but also doubles your loss. Use margin conservatively and always know your liquidation price before entering a trade.