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Originally Posted by OMG!WTF!
They actually carry much less risk. You have to maintain enough equity to satisfy margin requirements. If you fall below a certain percentage your broker will sell your holdings to maintain that ratio. You can't even lose all your money in a margin account much less lose more than you have as is the case in housing. I guess if you're a bad investor and just want to hope and pray things start going up again, selling with some money left on the table could be considered a risk.
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If the market crashes, they literally can/will sell your entire non margin positions as well to cover the margin losses.
You are correct, but in a crash instead of having stock that is depressed in value that you can wait on a recovery, you have nothing.
It would be akin to the bank immediately calling in a mortgage if your house price fell 1$ below the outstanding mortgage.