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Initial Margin |
Also found in: Wikipedia | 0.24 sec. |
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Initial Margin The percentage of the purchase price of securities (that can be purchased on margin) which the investor must pay for with their own cash or marginable securities. Also called the initital margin requirement. Notes: According to Regulation T of the Federal Reserve Board, the initial margin is currently 50%. This level is only a minimum and some brokerages require you to deposit more than 50%.For futures contracts, initial margin requirements are set by the exchange. Initial margin (1) Amount of money deposited by both buyers and sellers of futures contracts to ensure performance of the terms of the contract; (2) amount of cash or eligible securities required to be deposited with a broker before engaging in margin transactions. |
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? Mentioned in | ? References in periodicals archive | |
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In a volatile market, investors who put up an initial margin payment for stock may be required to provide additional cash if the price of stock falls, Yang said. For Treasury bonds held by your broker, the maximum initial margin is 90%. The Board would expect that if the SROs were given responsibility for initial margins on equities, they would replace the existing requirements with more risk-sensitive standards. |
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Initial Margin