by 
The Curious Bag
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Buying stocks on margin is the purchase of stocks through use of the investor's own money as well as money that she has borrowed through her margin account. If an investor has a margin account, she can borrow up to 50 percent of the investment in a particular stock.
Leverage
In the world of business and investment, "leverage" is the term used for the practice of borrowing money to magnify gains (or losses) on an investment.
Leverage in Other Types of Investment
For many investors, the example closest to home is a purchase of real estate, in which a large percentage of the money was borrowed from a bank.
Considerations
Margin is risky because if a stock falls, an investor will potentially owe more money than she initially invested. In that case, the investor may receive a margin call from her broker if a stock begins to drop. Also, brokerages will charge interest on borrowed funds.
Margin Calls
A margin call is a procedure in which the broker asks an investor to either deposit more money in the investment account, or the broker will sell some shares of the stock to cover the potential loss.
Fun Fact
Financial leverage of banks and other major institutions was a major contributing factor leading to the global financial crisis in the late 2000s.
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