A client account where the investment dealer lends a customer part of the purchase price of the securities. The client must deposit a "margin" account and the balance is advanced by the investment dealer. Most investment firms will advance up to 50% of the value of securities in the margin account if the client holds acceptable collateral. But margin accounts are highly risky investment strategies for sophisticated investors. The investment dealer can make a "margin call" and demand that the client deposit more money when the value of the account falls below a certain level. In a falling market, the client may find it difficult to cover a margin call and may be forced to sell investments at a loss.
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