What Is Leverage and Margin in Trading? Explained for Beginners “Leverage can multiply profits, but it can also multiply losses.” When beginners start trading, they often hear terms like leverage and margin. These concepts sound attractive because they allow you to trade with more money than you actually have. However, if not understood properly, leverage and margin can quickly lead to heavy losses. Let’s understand what leverage and margin mean, how they work, and why beginners must be extra careful while using them. What Is Margin in Trading? Margin is the amount of money you need to deposit with your broker to open a trade. Instead of paying the full value of a trade, you pay only a small portion called margin. The broker allows you to trade the remaining amount. In simple words, margin is like a security deposit that allows you to trade larger positions. Simple Example of Margin Suppose you want to buy shares worth ₹1,00,000. If the margin req...