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Margin trading - The foundation

Overview

This course is designed to help you make a well-informed decision about margin trading and determine if it may be an appropriate strategy to align with your investment goals. We will cover fundamental concepts of margin including – what is a margin account and how does it work? Through the use of examples, see how margin requirements work in practice and the mechanics of a margin call.

Objectives

When you complete this course, you will:

  • Know the potential benefits of using margin, along with the risks and ways to manage margin account risk
  • Be familiar with the requirements and industry regulations that govern margin borrowing
  • Understand margin calls, your obligations and what you can do to help avoid them
Course Outline
Title Type Highlight
1. What is margin? Video
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Margin trading is not designed for any specific type of customer – it may be right for any investor looking for additional leverage in their investment.

Margin trading is not designed for any specific type of customer – it may be right for any investor... More
2. Understanding the benefits and risks of margin Article
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Margin trading allows you to leverage securities you already own to purchase additional securities, sell securities short, or access a line of credit. Margin trading has the potential to either magnify your profits, or magnify your losses.

Margin trading allows you to leverage securities you already own to purchase additional securities,... More
3. Meeting the requirements for margin trading Article
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In order to purchase securities on margin and continue to hold them in your margin account, you must meet certain margin requirements.

In order to purchase securities on margin and continue to hold them in your margin account, you must... More
4. Avoiding and managing margin calls Article
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One of the most important things to understand about margin calls is that your brokerage firm has discretion as to when you are required to increase the equity in your margin account.

One of the most important things to understand about margin calls is that your brokerage firm has... More

Margin trading entails greater risk, including, but not limited to, risk of loss and incurrence of margin interest debt, and is not suitable for all investors. Please assess your financial circumstances and risk tolerance before trading on margin. Margin credit is extended by National Financial Services, Member NYSE, SIPC.

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