Borrowing

See also callable loan call money market A market that consists of the borrowing of money by brokers and dealers for... call money rate The interest rate that banks charge brokers to finance margin loans to investors....

carry trade Definition: A trade that consists of borrowing and paying interest in order to finance the purchase of an investment that pays a greater interest or a dividend stream.

Short selling involves borrowing stock (usually from the broker) to sell short and using margin to finance the borrowing.

The investor is "borrowing" the stock from the brokerage and selling it to someone, with the obligation of buying the stock back later.

bond A certificate issued for a period of more than one year with the purpose of raising capital by borrowing. The federal government, states, cities, corporations, and many other types of institutions sell bonds.

They have several benefits when compared to other borrowing options, including - Lower interest rates - Options to postpone payments - Longer repayment terms - Easier credit requirements Eligibility for some of these loans, ...

Collateral Any marginable securities (e.g., stock, cash) used a basis for borrowing money.

You will have to pay your broker a fee for the privilege of borrowing the security. Government National Mortgage Association (GNMA) ...

The practice of short selling involves borrowing shares of a security from your broker and immediately selling them at the current price.

Deposit : The borrowing and lending of cash. The rate that money is borro...
Deposit Dealings : Money Market operations.
Depreciation : A fall in the value of a currency due to market forces rat...

When trading on leverage, you are in effect "borrowing" money from your broker. The funds in your account (the minimum margin) actually serve as your collateral.

Leveraging, when short term stock trading, is the process of borrowing money to make money without changing or increasing the performance of the trade.

A central bank will increase the supply of money and decrease the cost of borrowing to stimulate an economy and vice versa to slow down an economy.

That's because management is normally able to earn a higher rate on its long-term borrowings than it pays out in interest expenses.

In finance, margin represents the act of borrowing money in order to invest in securities. Margin will expose investors to risk due to the interest payments on the borrowed amount.

Short Selling is the act of borrowing stock to sell with the expectation of price dropping and the intent of buying the stock back to replace at a cheaper price.

Short: The process of borrowing stock from a broker and selling it with the intent to buy it back cheaper.

This is very similar to short selling, but instead of borrowing stocks to sell, you are essentially borrowing money to purchase stocks on your own when the market value is down.

The discount rate becomes the base interest rate for most consumer borrowing as well. That's because a bank generally uses the discount rate as a benchmark for the interest it charges on the loans it makes.

It happens when the government is borrowing heavily while businesses and individuals also would like to borrow. The government can always pay the market interest rate, but the private sector cannot, and is therefore crowded out.

Margin investing is a borrowing method by which a forex investor can trade currencies at higher volume than he would be able to on his own.

Covered Interest Rate Arbitrage - An arbitrage approach which consists of borrowing currency A, exchanging it for currency B, investing currency B for the duration of the loan, and, after taking off the forward cover on maturity, ...

In the United States, federal funds are overnight borrowings by banks to maintain their bank reserves at the Federal Reserve. Banks keep reserves at Federal Reserve Banks to meet their reserve requirements and to clear financial transactions.

Borrowing secured by a homeowner's equity in a home. Home-equity loans allow you to borrow a certain amount and pay it back over a specified term, and they generally carry fixed interest rates.

He does this by borrowing them from a willing stockbroker. The short seller hopes that the shares will drop in value, because if they do, ...

Margin Trading - Margin Trading is a brokerage account that allows the investors to buy securities by borrowing a portion of the purchase price.

Interest rate parity is a non-arbitrage condition which says that the returns from borrowing in one currency, exchanging that currency for another currency and investing in interest-bearing instruments of the second currency, ...

The difference between buying and borrowing a stock is subtle but worth understanding. When an investor borrows stock, they're promising to give back the stock at a future point in time.

Naked short selling is an illegal trading activity that occurs when a stock is sold short on the market without ever borrowing any shares.

Any eligible individual may purchase securities on margin by borrowing money from their broker at a fixed interest rate (for example, 9.5%). The rate is determined by each brokerage house and normally decreases as the amount borrowed increases (e.g.

Of course, to take advantage of these opportunities you do need to either retain some cash, have the ability to switch from other assets or make use of unused borrowing capacity (for those few clients who have the tolerance for gearing).

In recessions, governments tend to ease discount rates in order to encourage borrowing and spending. If inflation starts to get out of control, the discount rate may be raised in order to discourage spending and put the lid back on rising prices.

See also: Market, Investment, Interest, Stock, Trading