Rehypothecation

Definition:

Pledging to banks by securities brokers of the amount in customers' margin account as collateral for broker loans, which are used to cover margin loans to customers for margin purchases and selling short.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Presidential election cycle theory

A theory that stock market trends can be predicted and explained by the four-year presidential election cycle.

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