Margin trading is a type of trading where investors can borrow money from a broker to purchase more assets than they could otherwise afford. This borrowed money is called "margin," and it acts as a type of loan that must be repaid with interest. Margin trading allows investors to increase their potential profits, but it also comes with increased risk, as losses can also be magnified.

To engage in margin trading, traders must first open a margin account with a broker and deposit a certain amount of collateral. The broker will then provide additional funds based on the amount of collateral deposited and the margin requirements set by the broker. Margin trading is most commonly used in the stock market and futures markets, but it can also be used in other financial markets. It is important to note that margin trading requires a high level of knowledge and risk management skills to avoid significant losses.