When you buy on
margin, you are
essentially
borrowing money from
your broker and the
borrowed sum will be
called at some
point.
In stock options you
will not be able to
borrow money from
your brokerage firm
in order to sell
stock options.
However, given you
have been approved
for credit by your
brokerage, you can
buy the underlying
stock of a stock
option on margin.
Buying on margins is
not usually
recommendable
because you are
risking more than
the money you have,
and that could put
you in a financial
burden very quickly
if things do not
turn out as you
planned them.
←
previous tip
next tip
→
