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There was over speculation in the Stock Market, which was not regulated.Many Americans purchased stock on credit. This was known as margin buying. The stock broker would lend the buyer money to purchase stock, when the stock was sold, the broker would take out the money owed him plus interest. As the market started to fall, most brokers called in their loans. Owners could not sell their stock or could not sell it at a price to cover the loan from the broker. This meant that both broker and owner lost money. Eventually, there were stocks for sale but no buyers.
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∙ 11y ago
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What happen when a person bought a stock on margin?
If they had bought a very large amount of stock on margin (and many did) and the "margin call" came in shortly after that with the market collapse (and it happened to countless people) they were, in effect, instantly bankrupt.
What does buying on margin mean?
Buying on margin is borrowing money from a broker to purchase stock.
What are the reasons for stock market crash?
margin requirement Democrats forced banks to make loans to people who could never have qualified otherwise. Predictably, they could not make their payments popping the housing bubble.
What is buying on margin?
its borrowing money to invest in the Stock Market
Many stock speculators in the 1920's put up as little as ten percent of the price of stock when they?
Bought on margin.
Where can one learn about margin accounts or stock loans?
There are a number of websites that offer financial advice issues such as margin accounts and stock loans. These include Investing Online, How Stuff Works, Wikipedia and the websites of most stock brokers. More professional paid for advice is also available from stock brokers.
What happen when a person bought a stock on margin?
If they had bought a very large amount of stock on margin (and many did) and the "margin call" came in shortly after that with the market collapse (and it happened to countless people) they were, in effect, instantly bankrupt.
Why did the federal reserve try to regulate margin loans and why were it's efforts only partly successful?
The Federal Reserve tried to regulate margin loans to gain control of margin requirements for stocks bought on margin. Regulation T gives the Federal Reserve the authority to change the percentage of the initial margin requirement for margin stock. Since 1974 the Federal Reserve has not deemed it necessary to adjust the margin requirement
What type of loan requires the borrower to make monthly payments?
Most loans require monthly payments. The ones most referred to in this category are mortgages, car loans, personal loans, and credit card loans. Also, student loans are repaid monthly and usually after a student has left college or has graduated from college. There are some loans where the repayment is in the form of a lump sum. One example of this is margin loans from a stockbroker. Normally when a stock is bought or sold on margin, the money borrowed to complete the transaction is repaid to the stockbroker in a lump sum.
Why was stock bought on margin considered a risky investment?
Why was stock bought on margin considered a risky investment
What does buying on margin mean?
Buying on margin is borrowing money from a broker to purchase stock.
Buying stock on margin remained profitable as long as .?
stock prices rose
Buying stock on margin remained profitable as long as?
stock prices rose
What are the reasons for stock market crash?
margin requirement Democrats forced banks to make loans to people who could never have qualified otherwise. Predictably, they could not make their payments popping the housing bubble.
What does it mean to buy a stock on margin?
buying stock on margin is buying stock with money you dont have. in essence buying with credit. this is now illegal i believe as it was one of the culprits behind the great depression
What is the term for buying stock with borrowed money?
Margin.
What is on margin?
its borrowing money to invest in the Stock Market
