What does "margin trading" enable investors to do?

Margin trading allows investors to borrow funds from a brokerage to purchase securities, effectively increasing their buying power beyond what they could achieve with their own capital alone. This is accomplished by using the securities in their brokerage account as collateral for the loan. As a result, investors can control larger positions than they could if they were limited to their personal funds. This increased buying power can amplify potential returns on investment, as it enables investors to take advantage of more opportunities in the market.

While it's true that margin trading involves some degree of risk, it does not limit liability when trading or restrict engagement to only long-term gains or low-risk investments. Therefore, saying that margin trading exclusively allows for long-term gains, low-risk investments, or limits liability does not capture the essence and functionality of margin accounts. Instead, it is primarily designed to enhance an investor's buying capacity and, in turn, their opportunity for larger gains or losses.