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Define Buying On Margin. If the customer chooses to borrow funds from a firm, the customer will open a margin account with the firm. Buying on margin is the purchase of a stock or another security with money that you’ve borrowed from your broker.
from venturebeat.com
Buying stock on margin is only profitable if your stocks go up enough to pay back the loan with interest. Absolute minimum equity held in a margin account after purchase. Differs at the time of purchase.
A customer who purchases securities may pay for the securities in full or may borrow part of the purchase price from his or her securities firm. You must have a margin account to do so, rather than a standard brokerage account. You get the rest of the money by borrowing it from your broker. Buying on margin refers to borrowing from a brokerage firm (through a margin account) to make an investment.
