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Kiplinger
Kiplinger
Business
Jeff Reeves

What Is Margin Trading?

The word margin written out on wooden blocks.

Folks who are new to investing inevitably stumble across the term "margin" after signing up for their favorite trading platform. But what is margin trading, and what does it mean for your portfolio?

Simply put, margin trading is the practice of investing with borrowed money. Some believe the term originates from the old days of physical ledgers, where your balance is recorded in neat columns – while investments made with money you don't actually have are jotted down off to the side, in the margins at the edge of the page.

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