Excessive margin trading can have devastating results on an investment portfolio. Margin trading is similar to taking out a marker at a casino. When buying stock on a margin, you are buying stock with money that is borrowed from your broker-dealer. Generally, certain accounts are pledged as collateral for the loan and interest is charged by the broker-dealer. Further, if accounts fall below certain thresholds, investors will be required to re-capitalize their accounts in order to meet minimum balance requirements. This process is known as a margin call. The process of trading on a margin is not for everyone; in fact, it is not a prudent course of action for most investors (the risk tolerance of most investors is not high enough to use a margin account for trading). One of the most obvious risks associated with margin trading is the ability to loose more money than you originally invested in a particular stock, even though stock has not lost 100% of its value. In addition, with investments purchased on a margin, you may be unable to hold the investment until its original value has been restored. If you have lost money due to unauthorized or excessive margin trading, you may be able to recoup you losses through arbitration or a court proceeding. We are a securities and investment fraud law firm with offices in Denver, Colorado and Seattle, Washington . We represent investors in FINRA arbitration proceedings and in courts around the country in all 50 states. All of our investment loss cases are taken on a contingent basis, meaning that we do not get paid unless we recover money for you. www.wesuewallstreet.com
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