Margin refers to the practice of borrowing funds from a broker to trade financial instruments, allowing investors to control larger positions than they could with their own capital alone. In a margin account, investors are required to maintain a minimum balance, known as the margin requirement, which is a percentage of the total trade value. While using margin can amplify potential profits, it also increases risks, as losses can exceed the initial investment, leading to margin calls where the broker may require additional funds to maintain the position. Proper risk management and understanding of margin trading are crucial for successful trading.