For whatever reason, a fair amount of mystery surrounds the concept of margin. There need not be.
Margin is no more mysterious than any other form of leverage or debt.
People borrow money to buy a home, a car, or a boat, to pay college tuition or finance a wedding, and sometimes to take a vacation. In the cases of mortgages and home equity lines of credit, the loans are secured by real estate. In other instances, such as paying bills with credit cards, the loans are unsecured , with only the borrower's credit history reassuring the lender that the money will be repaid. Margin is a secured loan, with stocks, bonds, and other securities serving as collateral. Many investors think of margin only when buying stocks for example, borrowing against the value of their securities to buy additional shares of a stock.