A loan or extension of credit that is larger than what the borrower can repay. Overextensions can require the borrower to consolidate his or her debts into a single loan. Consumers who must use more than a third of their net income to repay debt other than their mortgage are generally considered to be overextended.

For securities traders and investors, overextension represents leverage in excess of his or her account equity and buying power. This can greatly amplify losses in a bear market and force the trader to meet steep margin calls. Inability to do this can result in forced liquidation of securities and the freezing of the account.

Investment dictionary. . 2012.

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Look at other dictionaries:

  • overextension — noun see overextend …   New Collegiate Dictionary

  • overextension — See overextend. * * * …   Universalium

  • overextension — noun The state or quality of being overextended …   Wiktionary

  • overextension — SYN: hyperextension. * * * over·ex·ten·sion (o″vər ek stenґshən) extension, as of a limb, beyond the normal limit …   Medical dictionary

  • overextension — Synonyms and related words: bloat, bloating, breaking point, distension, extreme tension, franticness, frenziedness, haul, heave, hyperactivity, hyperkinesia, hyperkinesis, inflation, officiousness, overactivity, overdistension, overdrawing,… …   Moby Thesaurus

  • overextension — n. excessive extension, excessive lengthening; excessive prolongation …   English contemporary dictionary

  • overextension — | ̷ ̷ ̷ ̷ ̷ ̷| ̷ ̷ ̷ ̷ noun 1. : the act or an instance of overextending 2. : the condition of being overextended …   Useful english dictionary

  • overextend — overextension /oh veuhr ik sten sheuhn/, n. /oh veuhr ik stend /, v.t. 1. to extend, reach, or expand beyond a proper, safe, or reasonable point: a company that overextended its credit to diversify. 2. to extend for too long a time: to overextend …   Universalium

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  • Bowed tendon — Tendinitis/tendonitis is inflammation of a tendon. Many times, the tendon tissue is torn. A bowed tendon is a horseman s term for a tendon after a horse has sustained an injury that caused the tendon fibers to be torn, and then healed with bowed… …   Wikipedia

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