Buying on margin involves purchasing securities using credit from a broker, facilitated through a margin account, and is strictly regulated by the Federal Reserve Board (FRB).
A margin account is a type of brokerage account that allows customers to borrow money from their broker to buy securities, following regulations from the Federal Reserve Board, the National Association of Securities Dealers (NASD), the New York Stock Exchange, and individual brokerage house rules.
A regulated futures contract is a financial agreement that ensures daily settlement of gains or losses through margin accounts, and it must be traded on a qualified exchange following specified rules.
