Buy Now, Pay Later for stocks
Unlike the previous bull runs, there isn’t a lot of leverage in the system this time. Stocks are mostly bought with full money upfront. So when there are drawdowns in the market on days like today, retail investors are forced to liquidate, which also increases volatility.
Credit goes to SEBI & also all of us new-age online brokers who haven’t pushed customers to borrow and buy while placing orders. If platforms enabled greed by nudging users to borrow to buy more quantities, customers would ignore the risks of margin funding (MTF).
But given high customer acquisition costs for many brokers, what worries me is if someone launches a buy now pay later type of product for investing, it will end up pushing everyone else to start. Using this as a hook to generate revenue will not be right for the customers.
But given high customer acquisition costs for many brokers, what worries me is if someone launches a buy now pay later type of product for investing, it will end up pushing everyone else to start. Using this as a hook to generate revenue will not be right for the customers.