227k views
22 votes
What does it mean to "buy on margin?" What are the advantages? What are the disadvantages

User Arco
by
4.8k points

1 Answer

11 votes

Answer:

Buying on margin means when an investor buys an asset by borrowing the balance from a bank or broker. An advantage might be that when you buy securities on margin, you are able to leverage the value of securities you already own to increase the size of your investment. A disadvantage could be buying on margins

can lead to greater losses if the stock price drop.

Step-by-step explanation:

Hope this helps.

User NaveenBhat
by
6.0k points