Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 10, 2023 erstellt
Description:
A margin loan is defined as the amount of money borrowed from a broker to purchase securities, whereas a margin requirement is defined as the difference between the market value of the securities for which the loan is given and the loan amount. Margin requirements have long been carried out practically in all financial markets. Like all other financial markets, the Bangladesh capital market implement margin requirements. Currently, investors and stock market regulators in Bangladesh are very concerned about the performance of margin loans. This study tried to examine the effect of margin loans on investors’ behavior and performance in the stock market. A structured survey questionnaire was used to collect primary data from the capital market investors of Bangladesh. The data were collected from 24 March 2022 to 25 April 2022. In this study, 250 samples were used. The multinomial logistic regression model was used to examine the impact of margin loans on the investors’ investment behavior and performance. The study used investment horizon (short-term or long-term investment), size of investment after taking margin loan, and frequency of trade as dependent variables for measuring investors’ investment behavior. Returns and portfolio size were considered as dependent variables to measure investors’ performance. According to the findings, margin loans are inversely related to investment horizon, whereas margin loans positively influence investment size. The frequency of trading also increases after taking a margin loan. Returns and portfolio size were used to measure the investors’ performance. The amount of margin loan has a positive effect on the return. The amount of margin loan also has a positive impact on portfolio size. Brokerage houses can use this study to find their investors’ behavior and performance in the case of lending margin loans. This study can also be used by investors to make an informed decision about investing in the capital market with a margin loan. Further research into this area may explain the estimated margin loan rate for an investor