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1 answer:

konstantin123 [22]3 years ago

6 0

Answer:

If they make a successful investment, margin trading can increase their gains.

Explanation:

Another oft-overlooked disadvantage of buying on margin is that you'll owe interest on your loan. Just like with any bank, the higher the amount of money to work with, margin can be used to boost your returns or help diversify your portfolio. Trading on margin can be tempting for many investors because it lets them buy more shares than they can afford using their own money. If they make a successful investment, margin trading can increase their gains. However, using margin is also highly risky. Just as it increases gains, it increases losses.

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