What is margin buying of commodities?
When you buy commodities on margin, you use a small amount of cash to control a large quantity of raw material, such as wheat, gold or Treasury bonds. You must post an initial margin, depending on the contract, and keep a maintenance margin amount in your account. Because so little cash is needed to control large quantities of goods, margin buying uses leverage to boost your return. But beware — this strategy is risky. You can lose your entire investment — or more.
