Brokerage firms arrange funds to finance share purchase. This allows investors to invest more and increases their potential returns than they would with their own money.
To cash in their long-term investments, investors don't need to sell them. Investors can use shares in their portfolio to take up larger market positions.
With a modest amount of their own money, investors can increase their stock market investments.
Investors can take advantage of market opportunities by being able to invest more with less cash.
Margin funding allows investors to have more money and can be spread across many shares or securities. This diversification reduces the risk associated with investor's portfolio.