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During the 1920s, people would buy stock on margin, which meant that they

A) bought it on credit.
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Dana Herzog

Feb 20, 2025

Buying shares with margin implies borrowing money from a stockbroker to acquire a stock. You can imagine it as a loan made from your brokerage company. Purchases with margin allow you to buy more securities than your budget would normally allow you. By operating with margin you get great market exposure, depositing only a percentage of the capital you will use. The margin corresponds to the deposit you need to open a position, defined by the margin rate that your brokerage or broker company gives you.... Show More
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Dana Herzog

Feb 20, 2025

For the answer to the question above, in the 1920's people bought stock on margin which meant that they could hold the stock for as little as a 10% downpayment. They also bought the stocks by credit.They wait for the stock price to rise and then they sold it.... Show More
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D
Dana Herzog

Feb 20, 2025

In the 1920s, people invested in the stock market more than they ever did before. Prices rose very fast so that by the end of the 1920s, traders could become rich from buying and selling overnight. They bought stock on margin which meant that they could hold the stock for as little as a 10% downpayment. They then waited for the stock price to rise and then they sold it. During 1928 and 1929, the stock of many companies was valued more than what the companies were valued for. ... Show More
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