Crashes and the rules they brought · 1929–1950s
1929
The crash of 1929
Stocks bought with borrowed money collapse, and margin calls turn a fall into a rout.
In the late 1920s, many investors bought shares with as little as 10% of their own money, borrowing the rest. When prices fell in October 1929, brokers demanded more cash, and those who couldn't pay were sold out, pushing prices lower still. On Black Tuesday, 29 October, the market plunged.
💡 Why it made sense then
Borrowing made gains look easy while prices rose; the same leverage made the fall far worse.
🎮 In Journey Shares
The game's bank lends up to half of what your stocks are worth and sells them automatically if your own stake falls below 25%.
Ideas it gave us
- 🎯 Margin
Buying on margin means borrowing money from your broker to buy more stock than your cash alone allows, using your investments as collateral.
- 🎯 Margin call
A margin call is a demand from your broker to add cash or sell investments because your own stake in a margin account has fallen below the required minimum.
- 🎯 Leverage
Leverage is using borrowed money to increase the size of an investment, which magnifies both gains and losses.
Practise with $10,000 in play money
Free. No real money involved.