Cons: It's a bad idea to borrow more than 25% of the value of your stockholdings (even though you're allowed to borrow up to 50%). That's because drops could trigger an automatic sale.
Say you have $100,000 in assets and borrowed half of that. If your portfolio falls 10%, you are now allowed to borrow only $45,000, or $5,000 less than what you borrowed. Assuming you don't have the cash on hand, your broker will have to sell double the difference, $10,000, to get you back in line with the 50% limit, lowering your investment account to $80,000. If the stock market keeps falling, this can be a vicious cycle of forced selling when stocks are already down.
NEXT: Borrow from strangers