Buying on margin
- Borrowing money to buy stock in the hope that it will go up and you can repay the loan and collect the difference
- Had to make more than 10% to make money
- If stock went down you can’t pay original stock.
- No regulations
- Banks make guaranteed money
Buying on margin was so that people could borrow money from banks and brokers with the intentions of paying it back with some sort of interest rate, until the stock market crash.