margin buying

Definition

A risky technique involving the purchase of securities with borrowed money, using the shares themselves as collateral. Usually done using a margin account at a brokerage, and subject to fairly strict SEC buying on margin.

Use margin buying in a sentence

You may find that margin buying can be a very profitable way to go but it can also be very risky.

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The margin buying technique of the investor was carefully calculated to be wise as he had done his due diligence.

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Business advisers rarely recommend that clients fund their investments through margin buying, as they could easily lose ownership of their shares if they are unable to pay back the principal and/or interest used to invest in the first place.

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