3 ms·

I think the naming is important. The questions you listed don't fully describe how sub-optimal margin trading is.

• vorpalhex 6y ago
  You can do options trading and not do margin trading - which is my preference based on my personal risk surface. Margin trading comes with a bunch of other things these days - having to post effectively a bond, keep a certain amount of cash in your money market, etc.
  • xwdv 6y ago
    It's not a big deal. You pay a bit in interest while holding margin, but for the most part there's nothing wrong with having say 30% of your portfolio in margin while the market is rallying. Helps you get much better gains.
  • Jorge1o1 6y ago
    Still, options provide leverage compared to cash equities because the premium is cheaper than the stock price. And just as leverage can magnify profits on the way up, it can also magnify losses on the way down.