A cash account means that the only funds that you have available with which to buy stocks are funds that you first deposit in the account. Cash accounts are like checking accounts. Unless you have funds in the account, you cannot buy stocks. A margin account allows the investor to borrow a certain amount of cash from the brokerage. Typically, investors pay an interest rate on the money they borrow. Margin accounts are similar to credit card accounts: you can spend money you don’t have, but you must pay interest on your outstanding balance. I was raised to only spend what I have and to avoid
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