Not that I plan on doing any investing on margins, but I was looking at the limits for purchasing various things on margins in my brokerage account and happened on the limits for various bond types.
What possible circumstance is there were someone would even consider buying Treasury bonds on margins, and what madness is it that my margin limit for purchasing them is basically 10x my margin equity?
Why would this even be a thing?
Unless there is something I'm completely missing, it just seems to be a guaranteed loss of money!
Then again, there are a lot of things the truly wealthy do to make money that I can hear a long detailed description of how it works, and my brain just simplifies it to "They stick their hands in a pile of money, and it gets bigger!"🤣
Treasury bonds do go up and down in value, sometimes more dramatically than stocks.
@markbeiser wrote:Not that I plan on doing any investing on margins, but I was looking at the limits for purchasing various things on margins in my brokerage account and happened on the limits for various bond types.
What possible circumstance is there were someone would even consider buying Treasury bonds on margins, and what madness is it that my margin limit for purchasing them is basically 10x my margin equity?
Why would this even be a thing?
Unless there is something I'm completely missing, it just seems to be a guaranteed loss of money!
Then again, there are a lot of things the truly wealthy do to make money that I can hear a long detailed description of how it works, and my brain just simplifies it to "They stick their hands in a pile of money, and it gets bigger!"🤣
You are correct, in that for most people it would be losing money to simply buy treasuries on margin.
Note also that the Federal Reserve regulates margin trading and sets the margin limits. Individual broker-dealers may choose to set more stringent requirements than the Fed.
In practice, buying treasuries on margin would be part of an advanced options trading strategy, along the lines of your quote. 
One other note, once you have a non-zero margin balance, all securities you hold may be lent out by your broker-dealer. For those stocks that pay dividends, you wil receive dividends in-lieu from whomever borrowed those securities. The tax consequences of the dividends in-lieu are worth keeping in mind as the IRS treats in-lieu as ordinary income, so likely taxed at a higher rate.
@SeaProbe wrote:In practice, buying treasuries on margin would be part of an advanced options trading strategy, along the lines of your quote.
I was born a south Texas redneck, and do HVAC/R work, finances were never part of my education.
I'm decently set up for retirement in a few years, largely because I don't like beer, don't smoke, and recognized early in life that lotto tickets are a tax on stupid people, so have had money to fund an IRA for a few decades, and more recently have done pretty well with some buy and hold investments in my brokerage account.
I think I'll stick to what has been working for me, and mostly understand.🙂
