What does it mean to buy stocks on margin?
"Margin" refers to funds that are borrowed to buy stocks with. It's essentially a credit line from your brokerage that you can borrow from as needed to trade in your account. For example, you might buy $100 worth of stock and then buy another $20 on margin for a total position value of $120. If the value of your position increases to $200, then you can close your position, pay back the $20 you borrowed, and keep the rest of the $180. Remember, you'll need to repay the margin balance regardless of whether the trade works in your favor or not.