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What is trading on margin?

April 26, 2017margin trading

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What is trading on margin?

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Trading on margin allows you to take on leverage which means that you can enhance your return without increasing investment. Essentially, it is a method of financing an investment by which you only pay a small percentage of the purchase price in cash, with the balance supplemented by borrowed funds, in order to generate a greater rate of return than would be produced by paying primarily cash for the investment.