Accessibility Menu

What Is Margin & Should You Invest on It?

By Jeremy BowmanUpdated Mar 19, 2025 at 2:42 PM

Key Points

  • Margin trading involves using borrowed funds from a broker to buy stocks, potentially increasing gains and losses.
  • Interest on margin loans can be high, reducing net profit and increasing investment risk compared to traditional investing.
  • Margin calls require additional funds during market dips, potentially forcing sales of stocks at losses.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.