hypothecation

hypothecation definition - finance
The act of pledging property to another person for collateral without transferring the possession of the title or ownership of the asset. For example, hypothecation occurs when a trader pledges securities as collateral for his or her margin account.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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