Trading with margin is relatively straightforward and can be beneficial to some investors in many ways.” Added Mark Woodward, senior manager, margin product at TD Ameritrade: “Not everyone is aware of the potential benefits. Do margin the wrong way? You could lose your shirt.Įnlightened margin trading “is all about awareness,” said Chris Jennings, director of margin product at TD Ameritrade. Apply margin prudently and thoughtfully, and you can amplify returns and add diversification and flexibility to your portfolio. Trading with margin is like many parts of an investing strategy: There are “enlightened” ways to use margin and “unenlightened” ways. Risks of margin trading include losses due to “overleveraging,” which can lead to a margin call from the broker.Used properly, margin can be used to help diversify a portfolio or magnify gains from trading stock. ![]() ![]() Margin is borrowed money-often loaned by a broker-that can be used to buy stocks or other assets.
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