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However, since many people were using excessive leverage, they got margin called and their positions were liquidated, leaving them royally screwed. If the mark
by charlesdm 9y ago
However, since many people were using excessive leverage, they got margin called and their positions were liquidated, leaving them royally screwed.
If the market goes down 50% to recover to -25%, that’s fine. But if the market goes down 50% when you are using leverage 4:1 you will be liquidated quite fast.
- walshemj 9y agoThere is a great story in Harpo Marx's autobiography where one or more of the Marx brothers had a massive margin call and covered it by doing a command performance for some of the major mobsters.