Loading ...I think every body here knows what Margin is, but for others?
“Margin Call In finance, margin is collateral that the holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty.”
With the long term Bull Market that started on, and since, the March 2009 lows, caused a lot of over confidence. So after the over confident masses start running out of their own money to gamble with, they start borrowing the houses money.
The buyer and the house are then 50%/50% partners on the new buying. The only difference is the buyer or gambler has to pay interest on his half of the positions. The “partner” or house can’t lose, so if the stock goes down instead of up?
The house the wants the money back, and send you margin call for MORE up front money or sell you out on lows to get their money back. So millions are selling both losing and profitable positions to over ride losing positions and margin calls.