A brokerage account that allows you to borrow money to buy more securities than you could with just your cash. Using borrowed money to invest is called using leverage. Margin accounts require minimum account balances and charge interest on borrowed funds.
You open a margin account with $10,000. Your broker lets you borrow an additional $10,000, so you can buy $20,000 worth of stocks. If those stocks gain 20 percent to $24,000, your profit is $4,000 on your $10,000 investment, instead of $2,000.
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