Which does buying on margin involve?

Responses

traders risking large amounts of money for small profits

traders risking large amounts of money for small profits

brokers buying for traders in various foreign currencies

brokers buying for traders in various foreign currencies

brokers putting off the risk of default onto traders

brokers putting off the risk of default onto traders

traders borrowing money from their brokers

1 answer

Buying on margin involves traders borrowing money from their brokers. This allows traders to purchase more securities than they could with just their own funds, increasing both potential profits and potential losses.