A margin account is a brokerage account that allows you to borrow money from the broker to buy securities, using your existing securities as collateral. The borrowed amount is called margin; standard margin allows borrowing up to 50% of equity value. Margin amplifies both gains and losses — a 20% market decline becomes a 40% loss on margined portions. Margin interest rates are typically 7-12%. Margin calls force you to deposit cash or sell positions if equity falls below maintenance margin (25% typically). Margin is appropriate for short-term tactical opportunities by experienced investors; using margin in retirement accounts is generally not allowed.
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Margin Account
August 22, 2026 · Aditya Gupta
Investing
Related terms
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A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
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