Initial Margin (redirected from Margin (finance))

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.

See also: Broker's Call, Buying Power, Call Loan, Call Loan Rate, Equity, Federal Reserve Board, Leverage, Maintenance Margin, Margin, Margin Account, Margin Call, Minimum Margin, Regulation T

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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.