0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What is Borrowing money to buy stock?
Buying on margin
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 does it mean to buy stocks on margin?
Margin means you're borrowing money to buy stock. It's also one of the few ways you can lose more in the stock market than you invested in the first place.
How did buying on margin allow more people to invest in market?
Buying on margin allow people to buy more stocks with only a fraction of the cash needed to buy those stocks. These allowed more people to invest in the stock market that would not afford to come up with the full cash to buy the stocks in question.
What did buying stock on margin mean in the 1920's?
"Buying on Margin" meant that you would only have to put down a small percentage of money (10%) and the broker would cover the rest. If the stock price dropped too low the broker could issue a "Margin Call" which means that the person has to repay all of the money that the broker put down. People often used this in the 1920s in order to buy more stock for less. i.e. Instead of buying 5 stock for $10, he could buy 50 stock for $10 and a loan from the broker. If you were to sell the stock, the broker would get his money back plus a portion of the profits.
What is Borrowing money to buy stock?
Buying on margin
How did buying on margin allow more people to invest in the stock market?
Buying on margin allowed more people to invest in the stock market by enabling them to borrow money to purchase stocks. With a margin account, investors could put down only a fraction of the total cost of the shares they wanted to buy, typically around 10%, and borrow the rest from a broker. This allowed individuals with limited capital to have greater purchasing power and participate in the stock market.
What does it mean to buy on margin?
Margin means you're borrowing money to buy stock. It's also one of the few ways you can lose more in the stock market than you invested in the first place.
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 does it mean to buy stocks''on margin''?
Margin means you're borrowing money to buy stock. It's also one of the few ways you can lose more in the stock market than you invested in the first place.
What does it mean to buy stocks on margin?
Margin means you're borrowing money to buy stock. It's also one of the few ways you can lose more in the stock market than you invested in the first place.
How did buying on margin allow more people to invest in market?
Buying on margin allow people to buy more stocks with only a fraction of the cash needed to buy those stocks. These allowed more people to invest in the stock market that would not afford to come up with the full cash to buy the stocks in question.
Is buying on margin still illegal?
Yes, buying on margin was made illegal buy the Trust-in-Sercurities Act before the Great Depression. This Act was one of the reasons the stock marketcrashed, as people could not pay money they did not have anymore.
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 is the practice by which the buyer uses some of his or her own money to buy stock and borrows the rest from a broker?
Margin. :]
What does the Federal Reserve Bank of New York do to decrease the amount of stock purchased on margin?
Buy Back
What is the difference between buying on margin and margin call?
Buying on margin, taking a "margin" loan from the broker to help buy part of a stock purchaseMargin call, this happens when the broker demands full payment of your "margin" loan
