Wednesday, July 29, 2009 10:18:55 AM
Buying stocks on margin, to put it simply, is doubling your buying power buy borrowing up to 50% of a stock's price from your broker. In order to buy stocks on margin, there are a certain number of things to keep in mind. First of all, certain stocks can't be bought on margin. For example, any stock that is less than $5 a share (also called penny or micro-cap stocks) cannot be purchased on margin. In addition, IPOs (Initial Public Offerings, or companies that have recently gone public) also can't be purchased on margin until they've been on the market a certain amount of time.
http://www.businessknowledgesource.com/investing/_why_do_people_buy_stocks_on_margin_even_though_it_costs_them_to_do_so_021825.html
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