What is finance?

pyramiding is a speculative technique that people use to increase profits to build on previous unrealized profits. If the market is strong, this technique can be successful if it is artfully performed by someone with experience in the financial industry. On the weak market, this technique can bounce and someone can be left with a collapsed scheme and great financial responsibility. This technique tends to be used more often among highly experienced speculators, rather than new investors and conservative investors. As the investor increases the size of the investment, the margin grows and can continue to be reinvested and used. If the investor can carefully this process, trading can be completed to change the paper range to real money. If the pyramid is not carried out carefully and the value of the shares that are used to maintain the margin will begin to decline, the investor may encounter difficulties.

BROKERAGE HOUSES allow people to trade on a margin with an understanding that if investments reduce value, Margin will be issued. TOWhen the broker calls, the investor must either provide funds to complete the account, or agree to surrender securities to the intermediary so that the broker can sell them and close the gap. If someone relies primarily on the unrealized return in the pyramid investment plan, the margin calls can be too large to pay the investor.

The concept of pyramiding also occurs when corporations and other businesses are strongly used to expand and engage in other activities. Their debt is carefully extended and regularly moves it and repays one debt with another debt to expand the capital to which they have access. As with pyramiding, there are high potential risks if the scheme begins to disintegrate. May be so strongly used that it will have to declare bankruptcy.

6 In the pyramid scheme it is told people that they can buy an investment plan with great potentialby lifting revenues if they agree to hire friends. As soon as the recruits join, their funds get to the top of the pyramid and never see returns.