Profit

Margin calls dragged markets

PUBLISHED ON: January 23, 2008 | Duration: 3 min, 02 sec

  
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Markets may have recovered but investors still need to be paid back which may cause a vicious circle. Most market participants believe that the circuit down closing at opening on ridiculously low volumes had more to do with market problems and margin calls. Margin call is forced selling as one receives a margin call from a broker if one or more of the stocks one bought with borrowed money decreased in value past a certain point.
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