Buying on the Margin
- People borrowed money to buy stocks
- stock goes up- you pay back.
- Goes down- In debt
- There was no insurance
- Many people bought stocks due to stock market rising
Summary: Throughout the early twenties the stock market was greatly increasing, and many people noticed that. Many Americans bought lots of stocks with money that they did not have but "borrowed" and betting it all on the stock market. They would have to repay the money back to whoever they owed it to whenever they made enough money. Most money was placed into banks for safe keeping if there was some that was saved, but there was no insurance and that is what's called Buying on Margin.