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What is margin trade and how do margin trades magnify both the upside

potential and the downside risk of an investment position?

1 Answer

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A margin trade can magnify upside potential and downside risk of an investment portfolio because it allows an investor to invest in an amount greater than their ownmoney will allow. By having this greater amount of capital, they can achieve a greater upside potential if the value of the stock rises.
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User Endre
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