The Double-Edged Sword: Understanding Buying on Margin Buying on margin was a method of buying stocks that fundamentally reshaped the American financial landscape in the 1920s . At its core, it is the practice of purchasing securities with from a stockbroker. While it fueled the "Roaring Twenties" boom, it also created a fragile market structure that amplified the catastrophic 1929 stock market crash. 1. How Buying on Margin Works

When an investor buys on margin, they provide a small percentage of the stock's cost—the "initial margin"—and borrow the remaining balance from their broker. US History Chapter 18 Flashcards | Quizlet