So, just how big should I make my margins?

Here's an article on margins. As a sort of preface, a margin is essentially a loan that allows you to buy stocks and bonds. The problem with margins is that if you lose money and you bought your stock "on margin" you still owe the money. Current regulations limit margins to 50%. The percent refers to the amount of money that you pay out of your pocket. This means that if you have $100,000 to invest, you can invest up to $100,000 on margin. So, you'd have a grand total of $200,000 invested. $100,000 (i.e. 50%) of your investment is on margin, while the other $100,000 is actually money that you paid out of your pocket. The stock market crash of 1929 was due, in part, to loose margin requirements (at about 10%). For example, in 1929, if you had $100,000, you could invest up to $1,000,000. Obviously, if your stocks lost enough money, it could become impossible for you to pay back your loan, hence the Great Depression.