| Margin |
| Definition: Using what you want to buy as collateral so that you can buy it. Once you own it, its value is discounted by the amount you borrowed plus interest minus dividends. |
| When to not use margin: When you know that you may not be able to meet a margin call. If a margin call could force you into selling before you determine that you want to sell. Do not use margin if there is a possibility that you might be forced to liquidate your position if markets and/or the issue turns against you. |
| When to use margin: When you are reasonably certain that your position should be larger than your available cash would allow. Margin money is often the most expensive money you can use. It is expensive in terms of interest rate and in terms of the extended liability it places upon your position. |
| See also: Corrections |
| The investment axiom that is always valid: Caveat Emptor |
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