There are a few risks associated with trading on margin. They include: • Increased Losses. Since you’re borrowing money from your broker, you’ll have to pay them back, even if you experience a loss. Some investors lose much more than they invested in the first place. Add to the fact that you’re also paying interest. The amount to pay back will compound quickly if you can’t afford it. • Margin Call. A margin call is when your broker calls you to add more money into the margin account. This happens when the amount is below the margin minimum. Underperforming securities can cause the amount to dip this way. To resolve this, you’ll have to sell some of your assets to meet the margin requirement. Sometimes it gets so bad you’ll have to sell everything. This still isn’t the worst possible outcome from margin trading! • Liquidation. If you as an investor fail to keep your promise as per your margin loan agreement, the broker can take action. Robinhood can liquidate all the remaining assets in your account. This includes securities from other firms and companies. Liquidation can happen without your prior approval. Robinhood can simply do so within their rights. To prevent these outcomes, you shouldn’t bite off more than you can chew. Don’t borrow too much either. And if you do borrow, try to return in as soon as possible. If you trade on margin, you should never neglect to regularly look at your portfolio.