There is nothing wrong in buying stocks on margin. What the investor must recognize is that there is more risk involved. Aside from the purchased stocks going down, the added burden is having to pay interest on the borrowed funds or the "margin". The other danger is that an investor using margin can buy more stocks. Over speculation can either vastly be beneficial or be a personal income disaster.
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
Buying on margin
Margin.
stock prices rose
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
Buying on margin is borrowing money from a broker to purchase stock.
Buying 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
buying stock for a fraction of its cost and borrowing against future profits
Buying on margin
Margin.
stock prices rose
stock prices rose
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
They are both forms of borrowing.
05/08/08 Buying on margin means that you are buying your stocks with borrowed money_______________________________________________________________It means that you've borrowed money to finance your stock purchase. This is very risky and may lead to a margin call if the share price declines.
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.