Answer:
One of the most unpleasant experiences an investor, trader, or speculator might face in their lifetime is a margin call. Understanding how margin accounts work, and factoring in a little prevention and conservatism, can prevent a lot of potential pain down the line
Step-by-step explanation:
When you open a margin account with your stockbroker, futures broker, or commodities broker, you effectively tell them that, at some point, you may want to borrow money from them. You do this by pledging the cash and securities in your account as collateral for the margin loan. Once you borrow the funds to purchase securities, the broker can then sell off your other assets if needed to satisfy your margin loan, which is a potential disaster waiting to happen.