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Buying on Margin

This kind of buying stocks was usually only used by poor and middle class people. They would buy the stock, but only pay for part of it and borrow money from the stockbrokers to pay the rest. Then when they sold the stock for a higher price, they would pay the broker off and keep the rest of the profit. This practice led to the great depression, because the banks couldn't get their money back when the stock market crashed.

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