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Some stock brokerages literally let you trade with a multiple of the actual cash you have deposited. E.g. you have $10,000 in a brokerage account with Fidelity
by adamsmith143 4y ago
Some stock brokerages literally let you trade with a multiple of the actual cash you have deposited. E.g. you have $10,000 in a brokerage account with Fidelity and you apply for margin and they let you trade with $100,000 that you can then invest as you see fit. You multiply your possible returns but also your possible losses. If your losses become large enough you can get Margin Called and be forced to repay all of your losses at once. So if you lost all the 100K they gave you, you are now on the hook for those losses.