: In the 1920s, investors could buy stocks by putting down as little as 10% of the share value , borrowing the remaining 90% from brokers.
: If a stock’s price fell below a certain point, brokers issued a "margin call," demanding the investor immediately provide more cash to cover the loan. How Margin Buying Caused a "Death Spiral" how did buying stocks on margin cause problems
: This massive wave of "fire-sales" drove prices even lower. : In the 1920s, investors could buy stocks
When the market began to wobble in late 1929, the high levels of margin debt turned a minor correction into a total collapse through a self-reinforcing cycle: : In the 1920s
: Investors who couldn't meet margin calls were forced to sell their stocks immediately.
