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On wikipedia.org the short description of margin trading is collateral that the holder of a position in securities, options, or futures contracts has to deposit to cover the credit risk of his counterparty (most often his broker). usually Foreign exchange is normally traded on margin. When a relatively small deposit can control much larger positions in the stock market. For trading the main currencies, some bank requires a 1% margin deposit. This means that in order to trade one million dollars, you need to place just USD 10,000 by way of security.

In this case, you will have obtained a gearing of up to 100 times. This means that a change of, say 2%, in the underlying value of your trade will result in a 200% profit or loss on your deposit. As you can see, this calls for a very disciplined approach to trading as both profit opportunities and potential risks are very large indeed.

As a bonus for you who read my article, different from margin accounts in investing , there is cash account, and you can see the difference between them in this video