Margin lending or a margin loan allows you to borrow money against your current share portfolio to reinvest in equities and managed funds. Commonly referred to as gearing, a margin loan can significantly add to your ability to grow your portfolio by increasing your purchasing power.
Margin lending allows you to borrow additional funds against a wide range of approved shares as security, providing you with the opportunity to invest more money and diversify your portfolio, if required.
A margin loan provides you with the opportunity to magnify your profits; however it may also have the opposite effect, of increasing your exposure to potential losses.
A margin call is when your portfolio drops in value and your overall borrowing, exceeds the amount agreed. The value of your share portfolio always needs to be greater than the amount of money that has been borrowed.
margin call is a safety measure designed to protect you from losing all of your equity and owing more than you borrowed from the lender.
Upon receiving a margin call, the most common options available to restore the required level of equity to your account are.