If the value of the stock decreases below the margin, then even after selling the stock the investor would still owe the broker money. Buying on margin probably helped to fuel some of the stock market prosperity during the 1920's. At the time buying on margin wasn't regulated so the brokers could choose the margins they were willing to give. Another risk of purchasing stocks on margin is the dreaded margin call. In addition to the 50% initial margin requirement, the Federal Reserve also requires a maintenance margin of 25%. You must have 25% equity in your margin stocks at all times.