Timeline for Why would collateral be required to make a stock purchase?
Current License: CC BY-SA 4.0
6 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Feb 10, 2021 at 17:26 | comment | added | Bob Baerker | In this case, upvoting my answer makes you a unicorn ;->) | |
| Feb 10, 2021 at 16:58 | comment | added | RonJohn | Which is why I upvoted your answer. | |
| Feb 10, 2021 at 16:53 | comment | added | Bob Baerker | In case you missed it, my answer addressed the OP's question about why the GME short squeeze restrictions were implemented not the Captain Obvious answer that long margin buying and short selling require collateral. | |
| Feb 10, 2021 at 16:42 | comment | added | RonJohn | tld;dr "Because short sales are made with borrowed money, and loans require collateral". | |
| Feb 10, 2021 at 16:34 | comment | added | Bob Baerker | For those who haven't grasped it, hypothecation/rehypothecation addresses the OP's question about collateral. When the capital required for operation exceeds the loan amount that rehypothecation provides, the brokerage firm can't continue doing business. | |
| Feb 9, 2021 at 13:42 | history | answered | Bob Baerker | CC BY-SA 4.0 |