Investopedia

Continue to Site »

Overextension

Filed Under » , , , , , , , , , , ,
Dictionary Says

Definition of 'Overextension'

A loan or extension of credit that is larger than what the borrower can repay. Overextensions can require the borrower to consolidate his or her debts into a single loan. Consumers who must use more than a third of their net income to repay debt other than their mortgage are generally considered to be overextended.
Investopedia Says

Investopedia explains 'Overextension'

For securities traders and investors, overextension represents leverage in excess of his or her account equity and buying power. This can greatly amplify losses in a bear market and force the trader to meet steep margin calls. Inability to do this can result in forced liquidation of securities and the freezing of the account.

Articles Of Interest

  1.

    What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.

  2. The History Of Consumer Credit Rights

    The Fair Credit Billing Act of 1974 gave consumers the power to dispute credit card charges.

  3. Financial Designations That Employers Require

    We break down the designations that are important to have if you want to work in the financial sector.

  4. Stop Keeping Up With The Joneses - They're Broke

    Conspicuous consumption could be robbing you of future wealth.

  5. If You Don't Mind Volatility, Deere Could Still Do Alright

    Though Deere's shares sold off after earnings, the business model is sound and rolling along.

  6. Agilent Isn't Making It Easy On Investors

    Core operating performance at Agilent needs to improve

  7. Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.

  8. Should You Get A CFA, MBA Or Both?

    These certifications require time and money, but combined programs are making obtaining both designations more realistic.

  9. Depreciation: Straight-Line Vs. Double-Declining Methods

    Appreciate the different methods used to describe how book value is "used up".

  10. 6 Tips For Selling Your Home Fast

    Find out what you can do to stand out from the competition and make your home an easy sell.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center