By Matthew Makowski While there is some risk, the benefits of margin trading can outweigh the hazards. It’s a familiar tool for many investors. Because when used properly, it can offer a substantial boost to an active trader’s portfolio.
Margin trading gives access to additional investible capital. It’s essentially a line of credit – or loan – from a brokerage. It operates similarly to a home equity loan. Except in this case, instead of using the equity of a home as collateral, you can use cash or securities as collateral.
The amount of a home loan is determined by the value of the property. And …read more
