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If I have 1 million in some stock can I go get a 1 million loan from the bank with this as collateral? If so can I reinvest this million in the same stock again
by petermcneeley 2y ago
If I have 1 million in some stock can I go get a 1 million loan from the bank with this as collateral? If so can I reinvest this million in the same stock again and then goto the bank again etc?
- basementcat 2y agoThere is usually a margin requirement (25 to 75% depending on type of equity). And yes, you can.
- blasphemers 2y agoNo. You are not allowed to use these loans for investments, you would need a different type of loan for margin trading.
- kelnos 2y agoUsually they will not give you the full value. Depending on how "safe" they deem the security, they might only allow you to borrow 50%-70% against it. And most (probably all) of these forbid you from using the loan proceeds to buy more securities.