Buying Stocks with Online Loans and Margin Trading: The Hidden Risks You Must Know
Buying Stocks with Online Loans and Margin Trading: The Hidden Risks You Must Know
Is it safe to buy stocks using borrowed money from online loans or margin trading? Discover the answer here and understand the huge risks that beginner investors often overlook.
Why Are People Tempted to Use Online Loans for Stock Investments?
In today’s digital era, borrowing money has become extremely easy. With just a selfie and ID card, anyone can instantly get a loan without collateral. Data shows that more than 11 million people in Indonesia use online loan apps, with total loans reaching nearly Rp27 trillion — equivalent to the entire population of Jakarta!
This easy access often makes people think about using online loans as capital for buying stocks. Unfortunately, this idea is far more dangerous than it seems.
Why Debt and Stocks Don’t Mix
Loan Interest Is Always Certain
Legal online loans charge up to 0.8% per day. For example, if you borrow Rp1 million today, you must repay Rp1,008,000 tomorrow. The interest keeps accumulating regardless of the market.
Stocks Are Never Guaranteed
Stock prices can go up or down within hours. Expecting instant gains to cover loan interest is essentially gambling. Imagine paying 24% interest per month — is it realistic for stocks to rise that much in just a month?
“Debt always comes with guaranteed interest, while stock profits are never guaranteed.”
What Is Margin Trading?
Many brokerages offer margin trading, which allows investors to buy stocks using borrowed funds from the broker. For instance, with Rp1 million in your account, you may be able to buy stocks worth Rp5 million. At first glance, it looks like an opportunity to multiply profits — but the risks multiply too.
- If the stock goes up 1%, the profit is magnified.
- But if the stock drops 1%, the loss is also multiplied five times.
- This doesn’t even include transaction fees for buying and selling.
This is why margin trading is often described as a “double-edged sword.”
The Main Risks of Using Online Loans and Margin Trading for Stocks
- High interest rates that never stop accumulating.
- Multiplied losses even with small price drops.
- Financial stress from repaying debt while markets are uncertain.
- Potential bankruptcy if repayments cannot be made on time.
Smart Strategy: Use Cold Money
Stock investing should only be done with cold money — funds you don’t need for at least 2–3 years ahead. This way, you can stay calm through market fluctuations without being pressured by loan repayments.
Conclusion
Yes, you can technically buy stocks with online loans or margin trading, but the risks are enormous. The combination of high interest rates and market volatility makes this strategy closer to gambling than healthy investing. If you want to succeed in the stock market, use cold money and adopt a long-term mindset.
What’s your opinion on margin trading and online loans in stock investing? Share your thoughts in the comments and don’t forget to share this article so more people understand the real risks.
Label: Finance
Reference / Source:
Video Title: Buying Stocks with Online Loans | Margin Trading
Channel: Saham dari Nol
Link: https://www.youtube.com/watch?v=-47TfdcdVXk
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