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What Is Margin Trading and How Does It Work?

26 October 2022
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IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FAQs

Although margin trading can be an advantageous strategy it comes with significantly higher risks. Thus, it’s not so common among inexperienced traders. However, if you decide to try it on your investment portfolio, make sure you have a clear understanding of its peculiarities, merits, and drawbacks. Moreover, to gain some experience consider buying stocks of large and stable companies, so their price will be less prone to violent fluctuations.

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