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Margins and Options

 

When you buy on margin, you are essentially borrowing money from your broker and the borrowed sum will be called at some point.

 

In options you will not be able to borrow money from your brokerage firm in order to sell options. However, given you have been approved for credit by your brokerage, you can buy the underlying stock of a 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.

 

 

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