Pyramiding definition

Using paper profits from one investment as collateral to buy further positions while using a margin loan from a broker. This is a risky strategy because of the potential for prices to fall. Pyramiding also may occur if unrealized profits on existing futures positions are used as a margin to increase the size of the positions in successively larger increments.

An illegal scheme in which paper profits are used to finance the purchase of additional investments, or the offering of the opportunity to a participant to be paid for the chance to introduce new persons to the scheme who will each pay for the opportunity to introduce new persons, and so on.