Investing Hacks: Wondering if trading on margin is right for you?
Do you think margin trading could increase your returns?
Leverage is certainly a powerful tool to amplify your investment performance, but first, you must understand its risks.
What is Margin Trading?
What is Margin Trading?
Margin trading refers to the practice of using borrowed money from a broker to invest
Margin trading could amplify possible returns and losses on investment
Margin trading increases investors' buying power, but also involves higher risk and may trigger a margin call
Margin trading could amplify possible returns and losses on investment
Margin trading increases investors' buying power, but also involves higher risk and may trigger a margin call
Possible needs behind margin trading
- To average down holding costs when the market was dropping
- To invest when having no extra cash in the account
- To amplify returns via leverage
- To increase the utilization rate of funds
Pros and cons of margin trading
Advantages of margin financing on moomoo
The bottom line
While experienced investors may benefit from the increased purchasing power, we need proceed with caution.
Trading on margin could bring more loss than you might expect. Therefore, prepare for the worst and make sure you can afford it. If you can't take these risks, you should avoid margin financing.
Only use margin when you are relatively certain about your investment. Don't try to gamble upon margin trading. Interest rates or wrong investments may eat into your total profits and collateral funds.
Only use margin when you are relatively certain about your investment. Don't try to gamble upon margin trading. Interest rates or wrong investments may eat into your total profits and collateral funds.
Besides, you must have cash on hand and make a stop-loss rule to limit downside risks. Remember, you should be disciplined about your stop loss rules and not take any chances.
Last but not least, margin trading is highly risky. It's absolutely necessary to fully understand the risks involved. Be sure to carefully weigh the potential risks and rewards before deciding whether this strategy is right for you.
For more investment knowledge and trends, welcome to Courses in the Community.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Moomoo LearnOP :
After all the above learning, if you still have an interest in knowing more about 0% margin financing event on moomoo (for SG users) >>Direct access: https://fego.futusg.com/sgrzyh?global_content=%7B%22promote_type%22%3A1%7D
103005490 : gd
Moo Top : I used margin for just intra-day trading (1) avoid interest (2) increased capital
PlutoMoo102685100 : Margin amplify both losses and gains
Business Investor : Margin may bring in profits, but take note that moomoo takes a huge cut from fees. Even though moomoo fees may be low, it's still quite a significant of the cost.
mmfollower : Nice
绚丽的陈迪光 : Good
OperatorSR71 : Buy on margin when you're buying a big dip or bubble burst not a real great way to conduct business when everyone is hitting 52 week highs
绚丽的陈迪光 : good
103005490 :
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