About Margin Benefits

The deposit account is a traditional investment account with margin privileges.

This means that your agent has developed what amounts to a line of credit secured by stocks and bonds in your account. Often, this line of credit spread is used to buy more shares in the same account. When the market goes down temporarily, the NAV may fall, but the value of its debt does not change, you can find a “margin call” when you can pay less.

A margin call is like any other loan is called in. If you do not have money, their stocks and bonds are sold automatically to pay their debts. In times of market failures, an account will be much marginalized completely lost when the market goes down a fraction.

This leads to the idea of leverage, margin accounts, which is what they represent. Whenever you borrow money to invest, to leverage their investment or buy more than you can pay a partial payment. Because you buy shares with borrowed money, or loans against shares you already own, this is the result. Even a typical mortgage of 80% can end all your investments in a market low.

Despite the many risks associated with margin or the other lever on the other, it is likely benefits. If half of its capital comes from the margin, you can make money twice as fast. This agreement, when the market goes down, you lose twice as fast.

If used wisely governed by an investor, there is virtually no risk of having access to a deposit account. Imagine you have a credit card that is never used, but the credit line available for emergencies.