What is Margin | Margin Call Explained

Stock Margin is when you borrow funds from your broker to buy more stock. Margin can amplify your returns, but it can also hurt them if an investment turns against you.
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DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment.
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[@LearntoInvest]

I made a mistake in this video. At 2:30 I say that the account was now worth $12,250. What I should have said was that it was worth $12,500. And to make it even crazier. I did the rest of the math correct as if I had said the correct $12,500 the whole time. I apologize. It should have been 12,500, not 12,250. Oops!

[@DewTime]

Had to scroll to the comments to see if I was going crazy here. Glad to see it's the first comment!

[@pulseman4407]

I thought you paid the broker his comptions 250$😂

[@majdsahmarany3091]

And what if I tell you I was completely fine with the $12,250 and actually carried on with the example as if it’s a $12,500! Hahahahahaah no worries buddy it was a greatt explanation! Cheers

[@jonshei]

Almost made me think i was going crazy lol

[@puseletsobushy8074]

The explanation was very great though. It helped me understand. We are human by the way

[@jackwilson8651]

Honestly, you could not have explained this in clearer terms. Excellent.

[@kscarter1825]

You would be surprised how many videos I went through to get a simple explanation on this. This video was great.

[@NickPeitsch]

This was exactly the video I was looking for! Well explained!

[@ColinTalksCrypto]

Thank you for a super clear description and examples of investing on margin!

[@yomi001]

This is the best video I've seen on how margin works. Very clear explanations and examples. Well done!

[@ivelsuop9104]

Amazingly well done! Answers everything, thank you!

[@DerkMiester]

Wow, thank you for the clear and concise explanation of this!

[@christosneophytou1238]

Excellent Presentation, very clear explanations and you highlighted when interest is paid which is when you have a debt to the broker. This is probably the best you tube video on Margin, Margin Call, Maintenance Requirement. This is a channel worth subscribing. Very good work!!!

[@pololetigrou]

Never saw anyone explaining IM so well. Thanks a lot!

[@VinhNguyen-ul8yg]

The best explanation of Margins I have seen. I now understand it better. Thank You!!!

[@strengthandgracemovement9117]

Watched many videos about this but this one actually made it clear enough for me to understand! Whoop whoop 🙌🥳

[@UU-ry6gt]

best explanation I've heard! Thanks! We need more videos like this.

[@tommyharris5817]

The BEST video on margin call tutorial.

[@alpyoruk]

As easy to comprehend as it gets, thanks!

[@nasharcadia]

Watched a few videos and this is by far the best explanation. Thank you!

[@rashmis9123]

What an explaination...at the end of the video..I literally said "WOW" loudly! love love it

[@Alice-gl6um]

Thank you so much for the video! Helped a lot!

[@johnzarznia6814]

Back to the basics I see. You explained this well!

[@LearntoInvest]

Thanks John, I appreciate the support

[@HusseinDoha]

@@LearntoInvest That's a great explanation.

[@brandonspiegel2293]

thanks for the knowledge man!

[@William_Webber]

Thanks for this amazing explanation

[@farhadahmadzad7730]

Awesome, I just liked the examples and that made it super clear to me, thanks boss

[@majdsahmarany3091]

Such a great video Nice work buddy

[@alexgao4733]

this is so clear, way better than textbook

[@ellieinspace]

You are so good at teaching! Thank you!

[@sanazhm]

Very well explained. Thank you 👌🏼🌸

[@samrossi2641]

I had literally zero percent knowledge about any of this terminology or processes 5 minutes ago, and this was an extremely clear explanation that I don't feel the need to watch another video on this exact same thing

[@adarecords7013]

Thanks bud!! explaned well

[@aleksandersalajczyk5405]

Mistake or not video explains in simple terms what investing on margin and margin call is. Excellent. Now I understand the old saying "the only tip you can count on from you broker is a Margin Call"

[@Zeynep-zj3wh]

Thank you for the direct and easy explanation

[@sentinelese6717]

Wow...this was a really quick explanation.

[@elmamo2000]

Thank you! Subscribed!

[@EliteRoxor]

The clearest explanation out there.

[@minhluudinh5522]

this channel is pure gold.

[@tubeman1983]

Well explained! Thanks!

[@engkeelau7736]

Very clear! Thank you!

[@enriquevillacoronado2249]

I am here because of GME AMC... Great explanation, now I understand what is going on!

[@e.sanoop110]

Simple and beautifully explained. Thanks for making this vdo.

[@sherifyousry5586]

Thanks for this well explained video

[@chukwuyemmartinsonyisi3993]

Wow this the best explanation so easy and clear

[@ahmedtawfiq3625]

Great explanation 🙌🏼

[@keventrudel7106]

Im currently on margin call on one of my funds so thank you for the very Clair explanation

[@toniok5428]

Well explained ! From Paris

[@chrisnjiiri8668]

Good explanation..bravo

[@zilonggaming5469]

I appreciate this video, it helps me a lot.

[@ajprasad6865]

Hi Jimmy, u rule...great explanation!

[@danielelkadi3499]

excellent explination. thank you

[@abner6a]

Amazing explanation!

[@entrepreneurialhacks1255]

Thanks. Great video

[@jjenko6366]

Very clear, thanks

[@rawhenrnh]

Great explanation.

[@angusmac2037]

Great video my man! Can you use stocks you already own within the account instead of cash to meet the initial margin requirement ? In the video, you say he has $5000 “cash” and wants to invest in XYZ....what if he has $5000 in XYZ stock and wants to buy $5000 more and has no cash? I realize it says “buy more stock with that stock as collateral” above him but it’s not mentioned...Thank you for your patience!

[@moly_y549]

Thanks. Very clear.

[@MrAmalthejus]

Thank you

[@edwardchida2563]

thoroughly explained

[@mathewojwando5195]

Waw! Very well explained. 👍

[@charlielee9012]

For those that are wondering how is the margin call price determined, it is initial stock purchase price x ( (1-initial margin) / (1-maintenance margin))

[@ARTECH112]

Thank You Sir

[@vartikajain6468]

Great video

[@kylechampton]

Very helpful

[@SirDamned]

well John, that's a real big tie you got there

[@zorglub20770]

Very clear explanation!

[@greatestrecords3975]

No to me its not

[@greatestrecords3975]

Do you het a Margin call after a 0 equilaty or after a 0 available money to invest

[@paulfoustour2866]

you're a legend

[@TheDonMan97]

Stupid question: In your example, why can't the maintenance margin requirement just be 0%? Let's consider an example: Initially, Stock value per share = $1 Initial Margin Requirement = 50% Total shares to be bought = 10 000 My investment = $5000 Broker loan = $5000 My total portfolio worth = $10,000 Stock plummets to $0.5 My total portfolio worth is $5000 Now, the broker can still take back the loan they gave to trader by selling all his 10 000 shares. In this case, maintenance margin requirement = (my share of portfolio)/(Total worth of portfolio) = $0/$5000 = 0% What is the point of having a margin requirement bigger than 0% if they are always going to take the $5000?

[@palaniappant7884]

Clearly done.

[@greaterbash1475]

interesting clear and nice

[@HaIsKuL]

So it's the minimum percentage of the value of your position minus the loan over the value. Anything less, you'll have to pay up to reach that minimum percentage. If not, shares will be sold with the loan subtracted and now you're at a significant loss.

[@WillN2Go1]

Thank you, this is the best explanation I've been able to find on this topic. All the others talk about using 10x your investment as margin. To me they just seem like Russian roulette tutorials.

[@cloudmaster3235]

Likewise. I enjoyed this video .

[@ATIRadeonguy]

Glad to know Jordan Peterson teaches finance now. :)

[@s.a_mkhize]

😹😹😹😹😹😹😹

[@jasonkennedyhernandez4652]

this is relevant today.

[@roydenpereira5726]

nice one

[@icesummer1725]

Is there a way to automate this and just transfer the money to the margin account from an account i have with broker when my maint margin % falls 35%?

[@ltq8842]

i was looking for this to understand the movie.

[@1s1o1n1g1]

I am a new to the trading world. I have a question. I have an account deficit balance but I have never used or turn on the margin investing why I have account deficit? I asked some of the agent, but they asked too much personal information. Can it be trust? What question can they as to identify me?

[@purtol9686]

Thx

[@josephg8818]

do you get margin maintance back , say you have to add $ to cover maintenance so you add 100$ say the stock goes back up , do you get that 100 back in your account or you just owe less margin?

[@5ervanttechintel_github_io979]

I understand.

[@qualitytalks2801]

Just beautiful ❤️

[@khwiserosportsacademy6826]

great

[@kendigjl]

Gambling is one thing. Gambling with the idea that your information is twice as good as the markets information is another. Because that's the only way doubling your risk makes sense.

[@mairajamil001]

cool, now imma go watch margin call- you know, bcz of $gme stock n all

[@ChucksterJax]

I watched this because I saw this morning the following headline and wanted to understand what was happening: "Coronavirus Could Trigger Mortgage Market Crash as First FDIC-Insured Bank Falls" and "Mortgage holders could be in trouble as the first FDIC-insured bank falls in West Virginia." High-risk mortgage notes are vulnerable to being called, which would make mortgages due in full immediately. "When a bank’s assets get transferred to another institution following a bankruptcy or forced closure by state regulators, mortgages are turned over to another bank or investor. In such cases, the new lender can “call in” mortgage notes they find to be risky, making mortgage payments due immediately.

[@briankelly1240]

Can you pay off the margin debt at any time or only when you sell?

[@nena8687]

I have a suggestion. I'm in my masters program. Reading the book. Financial management for nurse manager ch3pg 58. I'm not understanding when hospitals work on margin. And predictor of closing and cas to debt ration. 😢 Can you make a video explaining that 🤔. Please. You're the best.. for all the nurses who are taking MBA classes.. 🎉 thank you for your time

[@BFArch0n]

How long do they give you to make the payment?

[@hammondcheesa-angwich6009]

Does margin mean the loan amount or the equity in your account?

[@frankt9156]

Does margin call happen at the end of day, after the market close?

[@enterpriseinfinite4900]

Can 'margin' trade applies to buy or sell?

[@appu537]

So when we recieve the margin call, does that mean that when we put extra money into the account, will it just stay there for the broker to cover up his investment, or wit will actually be invested in shares?

[@3kkant]

It will stay there for the broker as far as I know

[@ragnarox16]

Where is interest calculated and how often is it typically compiled

[@barnstormeerr]

But if I have not involved in any margin and traded with $5000 then even if I make loss of 25% I would still be left with $3750 which is better than $2500 as shown in the video if I've opted margin investment, but also if I'll make a gain on 5000 then my gain would only be 1250 but not $2500

[@aswler]

12,250 or rather 12,500?

[@LearntoInvest]

Yes, that was a mistake. The rest of the math is correct though 🙂

[@adamgibson7181]

What is the difference between a margin trade and using leverage?

[@Philson]

Hi I'm Jimmy.

[@anaswahid8520]

Sir why brokers give margin? What is the benefit of the margin that broker gives to their clients.?

[@gridcoregilry666]

so well done, but I feel screamed at xD

[@giacomopenengo7508]

So a lower % maintenance margin is better?

[@grains6002]

Amc to the moon

[@DanielNHofficial]

What about In a crash

[@kaushik031990]

what will happen if i pay for margin call and after that stock price go up