Features

A margin account is when your brokerage firm loans you money to purchase more stock than you could with a cash transaction, using the stock you already have as collateral for the loan.

Margin Agreement

You can use margin on an existing account, new account or a separate account. The brokerage firm is required to have a signed margin agreement on file; this explains the particulars of the loan.

Initial Investment

With a margin account you are required to have an initial investment of at least $2,000, this amount can be set higher by the brokerage firm.

Buying Power

When you are buying on margin, the initial deposit is 50 percent, this can change depending on the stock and the brokerage firm's requirements. The buying power is the total dollar amount of stock that you can buy using the loan and the initial 50 percent requirement.

Considerations

If the price of the stock drops to a certain point in which you owe more on the loan than the stock is worth, the brokerage firm may issue a margin call. This is when you have to add money because of a decline in the stock's value; if you do not pay the margin call, the brokerage firm can sell your stock to satisfy the requirements.

Source:

Investopedia: Margin Trading: What Is Buying On Margin?

Investopedia: Margin Account