The growth of margin debt has accelerated over the past several months, reflecting a generally bullish sentiment about Wall Street and the influx of new investors into the stock market.
Margin is a legitimate option for investors.
Persons using margin should realize that they can lose more money than they initially invest in their margin account. The Banking Department urged investors to carefully read their brokerage firm's margin agreement before opening a margin account and to consider whether margin is appropriate for their financial situation, investment goals and risk tolerance. In addition, investors need to consider the costs of margin loans and the effect of interest payments on their portfolio returns. Investors should contact their stockbroker if they have any questions about how a margin account works or what may happen if their stocks go down.