In the context of the Great Depression, refers to the speculative practice of purchasing stocks by paying only a small fraction of the share's price—often as little as 10% —and borrowing the remaining 90% from a stockbroker or bank .
This excessive leverage allowed even modest investors to control large blocks of stock, but it created a fragile market that collapsed when prices began to fall.
Buying on margin acted as a "multiplier" that transformed a market correction into a catastrophic collapse through a self-reinforcing downward spiral:
How did buying on margin contribute to the Great Depression?
