A margin loan can double your losses, not just your profits
Many investors think borrowing means more money working, so more profit. In a falling market it works the other way: your holding power shrinks, interest keeps running, and a margin call can force you to sell at the bottom. We’d rather you understand this before you decide.
margin accounts in Bangladesh owe more than their whole portfolio is worth.
Sources: The Business Standard, 26 Aug 2025 (accounts as of 31 Mar 2025) and 21 Jul 2026 (BSEC report, May 2026).
Borrowed money buys more shares, but you carry all the risk
Your savings, invested in shares.
Borrowed from your broker, with interest charged until you repay.
Gains and losses are on ৳15 lakh, but only ৳10 lakh is yours.
Danger line 1: Margin call
If your equity (shares minus loan) falls below 50% of what you owe, you must deposit more money within 3 working days.
Danger line 2: Forced sale
If your equity falls below 25% of what you owe, your shares can be sold without notice, usually at the worst prices.
The market falls 50%. Who survives?
Same savings, same shares, same crash. The only difference is a ৳5 lakh margin loan.
Investor A
Investor B
Investor A
Investor B
Investor A
Investor B
Example assumes 15% interest a year on the loan and BSEC’s revised margin call (50%) and forced-sale (25%) levels. It also assumes B’s deposit goes towards repaying the loan, and that the market doesn’t fall further. If it does, B faces more margin calls.
See where your danger lines are
Move the sliders. Watch how quickly the investor with a loan reaches a margin call compared with one investing their own money.
BSEC allows up to 1:1, so up to the same amount as your own money.
Your actual rate is set in your margin agreement.
Own money only
No pressure
With margin loan
No pressure
Move the sliders to compare.
Green is your money and red is the loan. Interest is simple interest for the period shown. This is an illustration only.
The hidden cost of a margin loan
Interest never sleeps
You pay interest every day, whether your shares go up, down or nowhere. In a flat market you lose money just by holding.
Less holding power
Your own money can wait years for a recovery. A loan comes with a deadline. The market can recover, but only after you’ve been forced out.
Margin calls need cash
When prices fall, you must find more money, at exactly the moment you’d rather be buying cheap shares.
Sold at the bottom
Forced sales happen when prices are lowest, turning a temporary fall into a permanent loss.
It’s like quicksand
Each margin call drags you deeper: more deposits, more interest, less equity. Many borrowers feel stuck for years.
The stress is real
Watching a loan eat your savings is overwhelming. Sleepless nights, family pressure and constant worry are a cost too, and no return is worth it.
Control greed. Protect your hard-earned money.
Our golden rules
What we tell our own clients.
- Invest only money you won’t need for the next few years
- Keep an emergency fund outside the market
- Buy in stages. Keep cash ready to buy more when prices fall
- Spread your money across good companies and sectors
- Decide your plan before you buy, and stick to it
- Never borrow to chase a hot tip or recover a loss
Still want a margin loan?
Mika Securities can support you. We’ll explain the agreement, interest and risks clearly before you sign. Here’s how it works under BSEC’s revised Margin Rules:
Our advice: if you do borrow, borrow far less than the maximum, and keep cash aside for a margin call.
Thinking about a margin loan?
Talk to our team before you decide. We’ll look at your portfolio and goals and give you an honest view, even if that means advising you not to borrow.
Send us a query
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Margin loan questions
What is a margin call?
A demand to deposit more money. Under BSEC’s revised Margin Rules, it happens when your equity (the value of your shares minus what you owe) falls below 50% of your margin loan. You have 3 working days to deposit; otherwise your shares can be sold.
What is a forced sale?
If your equity falls below 25% of what you owe, your shares can be sold without notice to repay the loan. This usually happens when prices are at their lowest, so the loss becomes permanent.
How big a fall triggers a margin call?
It depends on how much you borrow and how long you hold. With ৳10 lakh of your own money and a ৳5 lakh loan, a fall of about 50% triggers a margin call, or about 43% once a year’s interest is added. Borrow the full 1:1, and a fall of about 25% is enough, or just 14% after a year’s interest. Try the simulator above.
How much can I borrow?
Up to 1:1, meaning a loan equal to your own equity, on eligible ‘A’ and ‘B’ category shares with a P/E of up to 40. You need at least ৳3 lakh of your own investment. We generally advise borrowing much less than the maximum.
Isn’t a margin loan a quick way to grow my money?
Only if prices rise quickly and keep rising. When they fall, losses grow faster, interest keeps running, and you can be forced to sell. In our experience, most investors do better by investing their own money patiently and keeping cash to buy more when prices are low.
Invest with discipline. Sleep well.
Grow your wealth with your own money, at your own pace, with Mika Securities by your side.
*Based on Mika Securities’ own experience with margin clients; not an industry-wide statistic. Market data: The Business Standard (26 Aug 2025; 21 Jul 2026, citing BSEC). Rules: BSEC revised Margin Rules as reported by The Financial Express (19 Aug 2026); thresholds may change, and your margin agreement sets the terms that apply to you. Examples are illustrations only and assume 15% interest a year. Investment in the capital market carries risk. Mika Securities Ltd. is a TREC-holding stock broker of the Dhaka Stock Exchange (TREC No. 215) and a CDBL depository participant.