▁roles . ▁ ▁In ▁the ▁invest ment ▁mark ets ▁When ▁an ▁invest or ▁asks ▁a ▁bro ker ▁to ▁purchase ▁se cur ities ▁on ▁margin , ▁hyp othe cation ▁can ▁occur ▁in ▁two ▁sens es . ▁ ▁First , ▁the ▁purchased ▁assets ▁can ▁be ▁hyp othe c ated ▁so ▁that , ▁if ▁the ▁invest or ▁fails ▁to ▁keep ▁up ▁credit ▁rep ay ments , ▁the ▁bro ker ▁can ▁sell ▁some ▁of ▁the ▁se cur ities ; ▁the ▁bro ker ▁can ▁also ▁sell ▁the ▁se cur ities ▁if ▁they ▁drop ▁in ▁value ▁and ▁the ▁invest or ▁fails ▁to ▁respond ▁to ▁a ▁margin ▁call . ▁ ▁The ▁second ▁sense ▁is ▁that ▁the ▁original ▁depos it ▁the ▁invest or ▁puts ▁down ▁for ▁the ▁margin ▁account ▁can ▁itself ▁be ▁in ▁the ▁form ▁of ▁se cur ities ▁rather ▁than ▁a ▁c ash ▁depos it , ▁and ▁again ▁the ▁se cur ities ▁belong ▁to ▁the ▁invest or ▁but ▁can ▁be ▁sold ▁by ▁the ▁cred itor ▁in ▁the ▁case ▁of ▁a ▁default . ▁In ▁both ▁cases , ▁unlike ▁with ▁consumer ▁or ▁business ▁fin ance , ▁the ▁bor ro wer ▁does ▁not ▁typically ▁have ▁possession ▁of ▁the ▁se cur ities ▁as ▁they ▁will ▁be ▁in ▁accounts ▁controlled ▁by ▁the ▁bro ker , ▁however , ▁the ▁bor ro wer ▁does ▁still ▁retain ▁legal ▁ownership . ▁ ▁Re h yp othe cation ▁ ▁Re - h yp othe cation ▁occurs ▁when ▁the ▁cred itor ▁( a ▁bank ▁or ▁bro ker - de aler ) ▁re - uses ▁the ▁coll ater al ▁posted ▁by ▁the