What does trading "on the margin" mean for stocks?

Question

What does trading "on the margin" mean for stocks?

Answer 1

it means you borrow money to trade stocks.

Answer 2

Trading on margin is borrowing money from a brokerage firm to cover some of the cost of your purchases.

Under the rules of the Federal Reserve, a broker/dealer can lend you up to 50% of the purchase amount of securities you purchase.  However, these securities must be on the approved list (which most listed securities are) and with a market price of $5 or greater.

Rather than deposit monies in your account, an investor/trader can deposit securities and if approved the firm can lend you 50% of their market value.

The exchanges and brokerage firms (and their designated regulator) can make the amount required and/or the loan value more stringent than that required by the Federal Reserve.

Answer 3

Margin is credit that a bank or broker extends to you. Think of it as a loan.  

Answer 4

     It means : gambling with borrowed money, at 10 percent interest. During a downturn,  your portfolio will lose value faster, because you'll be using leverage. It can easily get into a "margin call" situation - then you'd have to either deposit "new" money, or do a lot of selling at the bottom.

   Beware of selling puts, for the same reason - easy to get into a reverse leverage situation