What is margin money?
Asked in Movies
How much money did Margin Call gross domestically?
What is margin money and how it is related to working capital?
Asked in Stocks
What does stocks on margin mean?
Asked in Business Accounting and Bookkeeping
What is the typical profit margin for commercial tenant fit out construction?
Asked in Definitions
What is the definition of the buying power of money?
"The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available. Also referred to as "excess equity." For example, if you have $1,000 cash in a margin account and the maximum margin rate is 50%, then your total buying power is $2,000. For a non-margin account, the buying power is equal to the amount of cash in the account." From Investopedia.com
Asked in Investing and Financial Markets
Why buying on Margin margin trading could be potentially very risky?
What is a margin in commodities trading?
A margin in commodities trading, is the amount of money you have to deposit in your brokerage account before trading a futures contract. The margin amount varies on each commodity and fluctuates with the volatility of the markets. There is an initial margin amount required when entering a contract and "maintenance" margin amount that must be kept in the account at all times during the contract holding period, which is typically lower than the initial margin. The balance of your account will fluctuate with gains and losses on the contract and if the balance falls below the "maintenance margin" amount, you get a "margin call", which means you must deposit enough money to meet the margin or close your contract. If you don't do either of these options, the broker will close the position before the balance falls to zero.
What is borrowing money to invest in the stock market is called?
Why did banks lose money in the stock market in the 1920's?
Stock market crash of 1929 causes?
One of the biggest causes was uncontrolled trading on margin. Trading on margin means borrowing money to buy stock, and it's very risky even today, when we have good controls on how much of your portfolio can be bought with borrowed money. (Short answer: you can borrow up to 50 percent of the value of the stock you own...if you have $10,000 in your margin account you can buy up to $20,000 worth of stock. Margin is pretty complex.) In the 1920s, you could borrow far more...so much so, that when the market crashed in 1929 people had borrowed more money to buy stock on margin than there was money to borrow. (A similar thing happened with derivatives in the Bush era: at the peak of the era, the notional dollar value of all outstanding derivatives was five times that of all the money in the world.) When the stock market started to contract and brokers started making "margin calls" - where the broker calls the investor and tells him to put more money in his account right now - the margin calls went unanswered because the money needed to meet all those margin calls didn't exist in the economy. This caused the stock market to collapse, taking the broader economy along with it.