What is Margin Investing?

Investing on margin means that you’re borrowing money from NOZAX to buy CFDs. This lets you invest more money (your own money, plus borrowed money) for greater potential gains or losses. It also gives you flexibility with your cash: if you see an opportunity in the market and want to invest more, you can invest right away without needing to make a deposit from your bank.

When you sign up for the NOZAX trading account, you’ll receive extra buying power. This represents the money that you’re allowed to borrow from us to invest.

What are the risks of margin?

NOZAX trading account is a margin account, so there are additional risks and responsibilities you should be aware of.

With margin investing, the returns on any stocks bought on margin directly affect your account value, whether they’re positive or negative. If the stock loses value, the losses will be deducted from your account value—not the funds you borrowed—so it’s possible for the margin to increase your losses.

For example, suppose you have $2,000 in your account and own $4,000 of ABC—$2,000 with your own cash and $2,000 with a margin that you borrowed from NOZAX. If ABC decreases by 25%, your portfolio of ABC stock will drop to $3,000 in value. However, you still borrowed $2,000 from NOZAX and need to pay that back. Since the value of your total portfolio is now $3,000 but you owe $2,000, your account is now worth $1,000.