Margin trading is the practice of borrowing money from a brokerage to purchase securities. The investor uses their existing securities or cash as collateral for the loan.
For example, with a 50% margin requirement, you could buy $10,000 worth of stock with only $5,000 of your own money. If the stock rises 10%, your gain is 20% on your investment. However, if it falls 10%, you also lose 20%. Margin calls may require you to deposit more funds.