How Do You Trade Stocks Without Margins?
When trading stocks on margin, you are borrowing funds from your stock broker to purchase stock and using the investment for collateral. Investors trade on margin to maximize their purchasing power. This allows them to purchase more stock without actually paying for it. But if the stock market suffers large losses, trading on margin can expose you to higher risk. That is why many investors are moving towards trading stocks without margins. Read on to have a better understanding of this investment strategy. Open a trading account with a financial intuition or stock broker. Be sure that they offer the option of trading without a margin. Fund your account immediately with a money order, check or bank transfer so you aren’t incurring debt with the bank. Understand the stock market. Since you won’t have the same purchasing power as those trading on margin, you will need to be savvier about investments. Read newspapers and magazines that specialize in stock trends, such as “Money” magazine.
