Definition
A loan provided by a brokerage that uses your investment portfolio as collateral to borrow additional funds.
What to consider
- Understand that margin loans amplify both gains and losses.
- Review the terms carefully to ensure they match your risk tolerance.
- Keep a close eye on market conditions if using margin.
Real world scenarios
- Using his investment portfolio as collateral, Sophia took out a margin loan to invest in promising new stocks, understanding that losses could be amplified.
Related terms
Related Playbooks
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