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What are the risks of a margin account?

April 26, 2017account margin

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10 Posted

What are the risks of a margin account?

1 Answer

0

10 Posted

Your potential losses are greater due to leverage if there is adverse market movement. If the market value of your securities declines, maintenance calls must be met on specified dates or usdirect will liquidate your securities to meet the call. The timing of such a sale could be unfavorable. The potential loss on short sales is without limit because there is no ceiling on the price of stock. You need to weigh the risk involved with margin trading before you decide to use this tool.