Three Ways to Use Margin and Leverage

November 22, 2022
Learn three ways investors and traders can maximize the use of margin while managing the risks of leverage in their investing strategies.
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How do margin loans work at Schwab?

Collaring Your Stock for Temporary Protection

Downturns are a natural part of any market. Learn how a collar strategy—a covered call and a protective put—might be a way to manage stock risk.

Your First Margin Call

What are your options for topping up your account after a position drops?

Margin: How Does It Work?

In the same way a bank can lend you money if you have equity in your house, your brokerage firm can lend you money against the value of the investments in your portfolio.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled Characteristics and Risks of Standardized Options before considering any options transaction. Supporting documentation for any claims or statistical information is available upon request.

When considering a margin loan, you should determine how the use of margin fits your own investment philosophy. Because of the risks involved, it is important that you fully understand the rules and requirements involved in trading securities on margin. Please read the Margin Risk Disclosure Statement for more information.

With long options, investors may lose 100% of funds invested. Multiple leg options strategies will involve multiple commissions. Spread trading must be done in a margin account. Writing uncovered options involves potentially unlimited risk.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor should review an investment strategy in the context of his or her personal situation before making any investment decision.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Short selling is an advanced trading strategy involving potentially unlimited risks and must be done in a margin account. Margin trading increases your level of market risk. For more information, please refer to your account agreement and the Margin Risk Disclosure Statement.

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