: The broker provided the rest of the funds, often charging interest rates between 14% and 19%.
: The purchased shares themselves served as the security for the loan. margin buying definition 1920s
In the 1920s, was the practice of purchasing stocks by paying a small fraction of the price upfront—typically 10% to 20%—and borrowing the remaining 80% to 90% from a stockbroker . The Mechanics of 1920s Margin Buying : The broker provided the rest of the
: Investors could "control" large amounts of stock with very little capital. a $100 investment could purchase $1
For example, a $100 investment could purchase $1,000 worth of shares.