Margin Trading Tutorial
Introduction
Imagine this: you're sitting at the blackjack table and the dealer throws you an ace. You'd love to increase
your bet, but you're a little short on cash. Luckily, your friend offers to spot you $50 and says you can pay him
back later. Tempting, isn't it? If the cards are dealt right, you can win big and pay your buddy back his $50
with profits to spare. But what if you lose? Not only will you be down your original bet, but you'll still owe your
friend $50. Borrowing money at the casino is like gambling-on-steroids: the stakes are high and your potential for
profit is dramatically increased. Conversely, your risk is also increased.
Investing on margin isn't necessarily gambling. But you can draw some parallels between margin trading
and the casino. Margin is a high-risk strategy that can yield a huge profit if executed correctly. The dark side
of margin is that you can lose your shirt and any other assets you're wearing. One of the only things riskier
than investing on margin is investing on margin without understanding what you're doing. This tutorial will teach
you some basic principles that you need to know.