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Margin Loan

Discussion in 'Investing Glossary' started by Glossary, 27th Sep, 2006.

  1. Glossary

    Glossary Active Member

    12th Sep, 2006

    A margin loan is simply a loan taken out to invest in shares or managed funds where the security you provider to the lender is your existing cash, shares or managed funds.

    As with all forms of borrowing this increases the total amount you can invest. Thus your potential gains and losses are increased.

    Another risk associated with margin lending is the potential for a Margin Call.

    See also:

    InvestEd resources:
    • Article: How Margin Loans Work
    • Toolkit: Market Drop Before Margin Call