Hacker News new | ask | show | jobs
by petermcneeley 610 days 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?
3 comments
kelnos 610 days ago
Usually 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.

link
basementcat 610 days ago
There is usually a margin requirement (25 to 75% depending on type of equity). And yes, you can.
link
blasphemers 610 days ago
No. You are not allowed to use these loans for investments, you would need a different type of loan for margin trading.
link