Stock exchange brokerages are busy places. Huge sums of money are flowing in and out in a matter of seconds. With each trade people are bagging millions of dollars. Some people do business in commodities as a full time occupation. They earn their bread and butter through trading in stock exchange. Money is always in electronic form when we talk of stock exchange. One wrong or dishonest click and your money travels away from you. That’s why you need to take utmost care and necessary security measures when you start trading in commodities.
Still there are plenty of risks when it comes to brokers and stock markets. One of them is excessive use of margin. Excessive margin is not customer’s own money. For example, if an investor owns three thousand dollars but he or she desires to make a purchase worth nine thousand dollars, then the person concerned will have to borrow the extra six thousand dollars from the brokerage. That’s how excessive margin works. Broker makes the purchase using excess margin to complete your order. The purchase is done partially with your own money and partially with the borrowed one. Excessive margin allows to make out of bound purchases. It is sometimes very profitable. With little money in hand, you can buy much more than that. The ratio at which you take profits shoots higher. But there are certain risks as well. For example if instead of high prices, the commodity you purchased goes down in value, you will have to sell it at a very crucial time. You have borrowed money from the brokerage through the broker and that’s why there is a threshold below which you can’t take the value and wait for it to go higher. That’s why you will be forced to sell at a very disadvantageous time.
You can lose all of your money in the process. If the value depreciates considerably then you may suffer from significant loss. For example if value of a commodity downs by 40% in a couple of week and you are holding lots of shares with the help of borrowed money. You will be forced to sell the shares after reaching a certain threshold because the brokerage needs to make sure that its own money remains secured. Hence you will have insufficient control over your investment. By selling the commodity at crucial times and also repaying tax amounts you can lose all of your money.
Galvin Legal Stockbroker Fraud Attorney can help you in getting recovery of your losses. You deserve a recovery and compensation. Your broker should intimate you of the dangers involved in the excessive margin trading. For example if you have placed all the money, your own as well as the borrowed one, on a couple of weak commodities, the danger of your financial loss is maximum.
So if you are victim of this financial loss, you should immediately contact Galvin Legal. They are simply the best to deal with these kind of issues. They have skills, experience, qualifications and training to help you recover your lost money.