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Over 700 finance terms, Shmooped to perfection.
An account you can set up with a broker or brokerage where you can borrow money in order to invest more money. The stocks or securities you buy are used as collateral to borrow money to buy more investments.
You set up a margin account and pour in $100,000. The agreement with your broker is for a 50% margin. That means your broker gives you $200,000 in investments in your account. The $100,000 in stocks you buy with your cash is used as collateral to help you buy more investments so your money can grow faster.