5 ms·
Ummm how exactly would banks give you 900m for 100m in collateral?! Can you make an example?
by mrlaserOO 5y ago
Ummm how exactly would banks give you 900m for 100m in collateral?! Can you make an example?
- dan-robertson 5y agoIt’s not banks but I think the GP is trying to describe a margin loan. Basically you give (say) an exchange $100, ask them to buy $1000 worth of stuff using your $100 as margin, and if the stuff you bought looks like it is going to be worth less than $900 (ie if they would make a loss by selling all your stuff) they will call you and ask for more collateral or, if you are too slow, sell all your stuff for eg $925, leaving you with a less of $75.