Margin investment loan
The most common risks associated with margin loans are: Margin calls as a result of market volatility and/or high gearing levels. Increase in borrowing costs, i.e. interest rate increases. Reductions in loan to value ratios assigned to securities. "Margin" is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. A margin account is an investment account in which a broker essentially lends the account holder cash to purchase securities. An investor with a margin account can usually borrow up to half of the total purchase price of marginable investments. The percentage amount may vary between different investments.