What is Margin | Margin Call Explained

Stock Margin is when you borrow funds from your broker to buy more stock. Margin can amplify your returns, but it can also hurt them if an investment turns against you.

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DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment.

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[LearntoInvest]

I made a mistake in this video. At 2:30 I say that the account was now worth $12, 250. What I should have said was that it was worth $12, 500. And to make it even crazier. I did the rest of the math correct as if I had said the correct $12, 500 the whole time. I apologize. It should have been 12, 500, not 12, 250. Oops!

[jackwilson]

Honestly, you could not have explained this in clearer terms. Excellent.

[kscarter]

You would be surprised how many videos I went through to get a simple explanation on this. This video was great.

[NickPeitsch]

This was exactly the video I was looking for!


Well explained!

[samrossi]

I had literally zero percent knowledge about any of this terminology or processes 5 minutes ago, and this was an extremely clear explanation that I don't feel the need to watch another video on this exact same thing

[johnzarznia]

Back to the basics I see. You explained this well!

[tommyharris]

The BEST video on margin call tutorial.

[christosneophytou]

Excellent Presentation, very clear explanations and you highlighted when interest is paid which is when you have a debt to the broker. This is probably the best you tube video on Margin, Margin Call, Maintenance Requirement. This is a channel worth subscribing. Very good work!!!

[kike_villa]

I am here because of GME AMC... Great explanation, now I understand what is going on!

[yomi]

This is the best video I've seen on how margin works. Very clear explanations and examples. Well done!

[ColinTalksCrypto]

Thank you for a super clear description and examples of investing on margin!

[sg-hu]

Watched many videos about this but this one actually made it clear enough for me to understand! Whoop whoop 🙌🥳

[VinhNguyen-ulyg]

The best explanation of Margins I have seen. I now understand it better. Thank You!!!

[aleksandersalajczyk]

Mistake or not video explains in simple terms what investing on margin and margin call is. Excellent. Now I understand the old saying "the only tip you can count on from you broker is a Margin Call"

[pololetigrou]

Never saw anyone explaining IM so well. Thanks a lot!

[alexgao]

this is so clear, way better than textbook

[sentinelese]

Wow...this was a really quick explanation.

[TheDonMan]

Stupid question:

In your example, why can't the maintenance margin requirement just be 0%?

Let's consider an example:
Initially,
Stock value per share = $1
Initial Margin Requirement = 50%
Total shares to be bought = 10 000
My investment = $5000
Broker loan = $5000
My total portfolio worth = $10, 000

Stock plummets to $0.5
My total portfolio worth is $5000
Now, the broker can still take back the loan they gave to trader by selling all his 10 000 shares.
In this case, maintenance margin requirement = (my share of portfolio)/(Total worth of portfolio) = $0/$5000 = 0%

What is the point of having a margin requirement bigger than 0% if they are always going to take the $5000?

[ivelsoup]

Amazingly well done! Answers everything, thank you!

[DerkMiester]

Wow, thank you for the clear and concise explanation of this!