What is Margin | Margin Call Explained

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  • Опубликовано: 25 июн 2018
  • 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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Комментарии • 155

  • @LearntoInvest
    @LearntoInvest  5 лет назад +257

    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
      @DewTime 4 года назад +12

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

    • @pulseman4407
      @pulseman4407 4 года назад +11

      I thought you paid the broker his comptions 250$😂

    • @majdsahmarany3091
      @majdsahmarany3091 4 года назад +4

      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
      @jonshei 4 года назад +2

      Almost made me think i was going crazy lol

    • @puseletsobushy8074
      @puseletsobushy8074 2 месяца назад

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

  • @jackwilson8651
    @jackwilson8651 2 года назад +88

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

  • @kscarter1825
    @kscarter1825 2 года назад +18

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

  • @NickPeitsch
    @NickPeitsch 4 года назад +60

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

  • @samrossi2641
    @samrossi2641 Год назад +1

    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

  • @johnzarznia6814
    @johnzarznia6814 6 лет назад +60

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

    • @LearntoInvest
      @LearntoInvest  6 лет назад +1

      Thanks John, I appreciate the support

    • @HusseinDoha
      @HusseinDoha 3 года назад

      @@LearntoInvest That's a great explanation.

  • @ColinTalksCrypto
    @ColinTalksCrypto 4 года назад +11

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

  • @yomi001
    @yomi001 Год назад +3

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

  • @ivelsuop9104
    @ivelsuop9104 3 года назад +4

    Amazingly well done! Answers everything, thank you!

  • @tommyharris5817
    @tommyharris5817 3 года назад +4

    The BEST video on margin call tutorial.

  • @pololetigrou
    @pololetigrou 2 года назад +1

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

  • @VinhNguyen-ul8yg
    @VinhNguyen-ul8yg 3 года назад +2

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

  • @alpyoruk
    @alpyoruk 4 года назад +3

    As easy to comprehend as it gets, thanks!

  • @DerkMiester
    @DerkMiester 3 года назад +4

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

  • @Alice-gl6um
    @Alice-gl6um 5 лет назад +2

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

  • @aleksandersalajczyk5405
    @aleksandersalajczyk5405 3 года назад +1

    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"

  • @UU-ry6gt
    @UU-ry6gt 3 года назад +2

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

  • @rashmis9123
    @rashmis9123 Год назад

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

  • @engkeelau7736
    @engkeelau7736 3 года назад +1

    Very clear! Thank you!

  • @brandonspiegel2293
    @brandonspiegel2293 5 лет назад +2

    thanks for the knowledge man!

  • @elmamo2000
    @elmamo2000 3 года назад +1

    Thank you! Subscribed!

  • @nasharcadia
    @nasharcadia Год назад +1

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

  • @ellieinspace
    @ellieinspace Год назад

    You are so good at teaching! Thank you!

  • @christosneophytou1238
    @christosneophytou1238 3 года назад +9

    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!!!

  • @alexgao4733
    @alexgao4733 3 года назад +1

    this is so clear, way better than textbook

  • @enriquevillacoronado2249
    @enriquevillacoronado2249 3 года назад +5

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

  • @tubeman1983
    @tubeman1983 4 года назад +1

    Well explained! Thanks!

  • @adarecords7013
    @adarecords7013 4 года назад +1

    Thanks bud!! explaned well

  • @majdsahmarany3091
    @majdsahmarany3091 4 года назад +1

    Such a great video
    Nice work buddy

  • @farhadahmadzad7730
    @farhadahmadzad7730 3 года назад +1

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

  • @strengthandgracemovement9117
    @strengthandgracemovement9117 3 года назад +9

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

  • @sanazhm
    @sanazhm 3 года назад +1

    Very well explained. Thank you 👌🏼🌸

  • @EliteRoxor
    @EliteRoxor 3 года назад +1

    The clearest explanation out there.

  • @William_Webber
    @William_Webber 4 года назад +7

    Thanks for this amazing explanation

  • @sentinelese6717
    @sentinelese6717 Год назад +1

    Wow...this was a really quick explanation.

  • @Zeynep-zj3wh
    @Zeynep-zj3wh 10 месяцев назад

    Thank you for the direct and easy explanation

  • @minhluudinh5522
    @minhluudinh5522 8 месяцев назад

    this channel is pure gold.

  • @ahmedtawfiq3625
    @ahmedtawfiq3625 3 года назад +1

    Great explanation 🙌🏼

  • @jjenko6366
    @jjenko6366 3 года назад +1

    Very clear, thanks

  • @chukwuyemmartinsonyisi3993
    @chukwuyemmartinsonyisi3993 3 месяца назад +1

    Wow this the best explanation so easy and clear

  • @e.sanoop110
    @e.sanoop110 2 года назад +1

    Simple and beautifully explained. Thanks for making this vdo.

  • @sherifyousry5586
    @sherifyousry5586 4 года назад +1

    Thanks for this well explained video

  • @abner6a
    @abner6a Год назад

    Amazing explanation!

  • @entrepreneurialhacks1255
    @entrepreneurialhacks1255 Год назад

    Thanks. Great video

  • @moly_y549
    @moly_y549 Год назад

    Thanks. Very clear.

  • @keventrudel7106
    @keventrudel7106 2 года назад

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

  • @zilonggaming5469
    @zilonggaming5469 5 месяцев назад

    I appreciate this video, it helps me a lot.

  • @danielelkadi3499
    @danielelkadi3499 Год назад

    excellent explination. thank you

  • @toniok5428
    @toniok5428 3 года назад +5

    Well explained !
    From Paris

  • @chrisnjiiri8668
    @chrisnjiiri8668 4 года назад +3

    Good explanation..bravo

  • @rawhenrnh
    @rawhenrnh 3 года назад +2

    Great explanation.

  • @vartikajain6468
    @vartikajain6468 2 года назад

    Great video

  • @ajprasad6865
    @ajprasad6865 4 года назад +1

    Hi Jimmy, u rule...great explanation!

  • @edwardchida2563
    @edwardchida2563 3 года назад +1

    thoroughly explained

  • @mathewojwando5195
    @mathewojwando5195 2 года назад

    Waw! Very well explained. 👍

  • @zorglub20770
    @zorglub20770 5 лет назад +3

    Very clear explanation!

  • @MrAmalthejus
    @MrAmalthejus 5 лет назад +2

    Thank you

  • @kylechampton
    @kylechampton Год назад

    Very helpful

  • @roydenpereira5726
    @roydenpereira5726 3 года назад +1

    nice one

  • @greaterbash1475
    @greaterbash1475 2 года назад

    interesting
    clear and nice

  • @paulfoustour2866
    @paulfoustour2866 Год назад

    you're a legend

  • @ATIRadeonguy
    @ATIRadeonguy 4 года назад +12

    Glad to know Jordan Peterson teaches finance now. :)

    • @s.a_mkhize
      @s.a_mkhize 3 года назад

      😹😹😹😹😹😹😹

  • @kendigjl
    @kendigjl Год назад

    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.

  • @SirDamned
    @SirDamned 3 года назад +2

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

  • @ARTECH112
    @ARTECH112 Год назад

    Thank You Sir

  • @palaniappant7884
    @palaniappant7884 2 года назад

    Clearly done.

  • @jasonkennedyhernandez4652
    @jasonkennedyhernandez4652 2 года назад

    this is relevant today.

  • @charlielee9012
    @charlielee9012 Год назад

    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))

  • @ChucksterJax
    @ChucksterJax 4 года назад +1

    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.

  • @TheDonMan97
    @TheDonMan97 2 года назад +1

    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?

  • @WillN2Go1
    @WillN2Go1 2 года назад +1

    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.

  • @angusmac2037
    @angusmac2037 4 года назад +2

    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!

  • @ltq8842
    @ltq8842 2 года назад

    i was looking for this to understand the movie.

  • @khwiserosportsacademy6826
    @khwiserosportsacademy6826 3 года назад +1

    great

  • @HaIsKuL
    @HaIsKuL 3 года назад +1

    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.

  • @Philson
    @Philson 3 года назад +2

    Hi I'm Jimmy.

  • @qualitytalks2801
    @qualitytalks2801 2 года назад

    Just beautiful ❤️

  • @purtol9686
    @purtol9686 Год назад

    Thx

  • @icesummer1725
    @icesummer1725 4 года назад +1

    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%?

  • @5ervanttechintel_github_io979
    @5ervanttechintel_github_io979 5 месяцев назад

    I understand.

  • @gridcoregilry666
    @gridcoregilry666 2 года назад

    so well done, but I feel screamed at xD

  • @1s1o1n1g1
    @1s1o1n1g1 8 месяцев назад

    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?

  • @mairajamil001
    @mairajamil001 3 года назад +2

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

  • @josephg8818
    @josephg8818 2 года назад

    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?

  • @briankelly1240
    @briankelly1240 3 года назад

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

  • @hammondcheesa-angwich6009
    @hammondcheesa-angwich6009 4 года назад

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

  • @BFArch0n
    @BFArch0n Год назад

    How long do they give you to make the payment?

  • @aswler
    @aswler 4 года назад +10

    12,250 or rather 12,500?

    • @LearntoInvest
      @LearntoInvest  4 года назад +3

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

  • @enterpriseinfinite4900
    @enterpriseinfinite4900 2 года назад

    Can 'margin' trade applies to buy or sell?

  • @frankt9156
    @frankt9156 Год назад

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

  • @ragnarox16
    @ragnarox16 2 года назад

    Where is interest calculated and how often is it typically compiled

  • @adamgibson7181
    @adamgibson7181 Год назад

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

  • @misterpogi9399
    @misterpogi9399 3 года назад

    4:11 I heard the chicken voice 😁

  • @wenjizeng89
    @wenjizeng89 4 года назад +13

    Ring ring on my phone
    Checked and it's from my broker
    Me internally: GUH

    • @deadshot6554
      @deadshot6554 3 года назад

      Ah, I see you are a man of culture

  • @appu537
    @appu537 5 лет назад +3

    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
      @3kkant 3 года назад +1

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

  • @giacomopenengo7508
    @giacomopenengo7508 4 года назад

    So a lower % maintenance margin is better?

  • @grains6002
    @grains6002 2 года назад +3

    Amc to the moon

  • @anaswahid8520
    @anaswahid8520 3 года назад

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

  • @savann.sun1980
    @savann.sun1980 7 месяцев назад

    If I understand correctly, the broker makes money no matter what with my money. But I have somehow a higher return. Damn, broker you are smart.

  • @kaushik031990
    @kaushik031990 3 года назад

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