A margin account, on the other hand, is an account for which your broker lends you money to buy stocks. It provides a great opportunity to leverage your investment to help increase your return. The brokerage uses your account as collateral for that loan, on which you owe interest to your broker.
A margin account is a brokerage account which allows investors to leverage the funds and securities they already own to purchase additional securities.
A cash account, as the name suggests, is a type of account in which you pay the full amount for the stocks you buy. With a brokerage cash account, you can only invest the cash that you have deposited in your account. A cash account is a type of brokerage account in which the investor must pay the full amount for securities purchased.
Margin accounts extend you a line of credit that lets you leverage your cash balance…
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