pyramiding (noun, pyr-a-mid-ing, \ ˈpɪrəmɪdɪŋ \)
Definition: can have a number of meanings in business. Firstly, pyramiding may imply a process of increasing the margin by using the unfulfilled returns from the previous successful trades. In other words, this process involves surrendering some previously owned shares in order to pay at least a part of the exercise price and then purchasing a larger number of shares, which results in more funds being added with each purchase. The term “pyramiding” may also imply a situation when a company or a business borrows money from a bank in order to pay its debt to another bank, and then continues borrowing from other banks to pay off the previous ones. In both cases, pyramiding is a risky practice that can result in bankruptcy.
In a Sentence:
- Pyramiding is the only option we have right now, even though it is quite risky.
- Because they didn’t have the money to pay the original lender, they have decided to try the pyramiding and started borrowing money from other banks.
Synonyms and related words: shares, stocks, trade, exercise price, option shares, bankruptcy, margin
