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Margin debt refers to borrowing money from a broker to buy securities, using the securities as collateral. It allows investors to increase their purchasing power and potentially enhance their returns. However, it also poses risks as margin calls can occur if the value of the borrowed securities declines significantly. In such cases, investors are required to deposit additional funds or sell the securities to cover the borrowed amount. Margin debt can amplify investment gains but can also lead to significant losses if not managed carefully. It is important for investors to understand the risks involved and have a solid risk management strategy in place when utilizing margin debt in their investment strategies.
The margin of main products varies depending on the specific product and industry. It is typically calculated as the difference between the selling price of a product and its production cost, and can be expressed as a percentage or in terms of monetary value.
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