The Motley Fool Discussion Boards

Previous Page

Learning to Invest / Terms, Definitions, & Jargon


Subject:  Rehypothecation and other questions Date:  6/24/2004  4:35 PM
Author:  IIMarcIIAdlerII Number:  1385 of 2244

When a brokerage, in order to make a loan to a customer, borrows money and puts up money or stocks from the customer's own collateral as collateral for the loan, this is called rehypothecation, I think. Is this correct? If it is, why are the terms "hypothecation" and "rehypothecation" so rarely used? Would it be correct to assume that the term "pledge" is a more common way of saying the same thing?
Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us