What is margin?

Margin refers to the amount of money or securities that an investor deposits with a broker to guarantee performance of an obligation. It is usually expressed as a percentage of the total value of the asset or securities. In trading, margin allows investors to trade with borrowed funds, amplifying their potential profits or losses. Margin requirements are set by individual brokers and may vary depending on the asset being traded, the investor's level of trading experience and account size, among other factors. It is important to carefully manage margin use since losses can exceed the amount of deposited margin, resulting in the liquidation of positions and potential financial difficulties.