March 20, 2013 at 17:58 PM EDT
How To Trade: Margin Accounts Amplify Gains, Losses
Savvy investors can use margin to get more bang for their buck in the stock market. They also know and respect the risks of margin when things aren't working right. A margin account allows investors to borrow money from a brokerage to buy more securities than they otherwise could, creating the potential for bigger profits -- or bigger losses. Let's say you pay $20,000 cash to buy 1,000 shares of a $20 stock. The stock rises to $30. Your profit
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