Margin accounts

A margin account is a type of brokerage account that allows you to borrow money from the broker to buy more securities than you could with your cash alone. This leverage can amplify gains but also increases risk, as losses can exceed your initial investment. You’re required to maintain a minimum balance, called the margin requirement, and if your account value drops below this, you may face a margin call, needing to add funds or sell assets to cover the shortfall. Essentially, margin accounts enable you to leverage your investments, but they come with added financial responsibility.