Tag: margin account

A margin account is a type of individual investor account that allows for the borrowing of funds from a broker or financial institution to purchase securities such as stocks, bonds, or mutual funds. These accounts are typically characterized by their potential for amplified gains — or amplified losses — but require adherence to stringent rules concerning collateral, buying power limits, margin calls, and other regulations. Margin accounts are popular among active traders or investors looking to maximize their potential returns with limited capital.