Margin trading allows traders to buy and sell financial instruments by using borrowed funds provided by the broker, enabling significantly higher exposure than their actual capital. By paying only a fraction of the total trade value as margin, traders can participate in larger positions and potentially enhance their returns. This trading facility is widely used in equities, commodities, currencies, and derivatives, making it suitable for experienced traders who understand market volatility and risk management.

While margin trading offers the advantage of increased purchasing power and efficient capital utilization, it also involves higher risk, as losses can be magnified along with gains. Therefore, disciplined strategies, proper stop-loss placement, and continuous market monitoring are essential for successful margin trading.