Margin
1.
Money that an
investor has
borrowed from a
broker in order to
buy securities. An investor who buys on margin can realize huge
gains if the
price of the security moves in a favorable direction; however, he/she also takes on a great deal of risk because it may not move in such a direction. See also:
minimum maintenance,
margin call.
2. A measure of how well a company controls its
costs. It is calculated by dividing a company's
profit by its
revenues and expressing the result as a percentage. The higher the margin is, the better the company is thought to control costs.
Investors use the margin to compare companies in the same industry as well as between industries to determine which are the most profitable. It is also called the
profit margin.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
margin
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
Margin.
Margin is the minimum amount of collateral -- in either cash or securities -- you must have in your margin account to buy on margin, sell short, or invest in certain derivatives.
The initial margin requirement is set by federal law and varies from product to product. For example, to buy stock on margin, you must have at least 50% of the purchase price in your account.
After the initial transaction, maintenance rules set by the self-regulatory organizations, such as the New York Stock Exchange (NYSE) and NASD, apply.
Under those rules, you must have a minimum of 25% of the total market value of the margined investments in your account at all times. Individual firms may set their maintenance requirement higher -- at 30% or 35%, for example.
If your equity in the account falls below the maintenance level, you'll receive a margin call for additional collateral to bring the account value back above the minimum level.
margin
the difference between selling price and cost price of a PRODUCT or FINANCIAL SECURITY. See PROFIT MARGIN, SPREAD.Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
Margin
On an ARM, an amount (usually two to three percentage points) that is added to the interest rate index to obtain the interest rate charged the borrower after the initial rate period ends.
See Adjustable Rate Mortgage (ARM)/How the Interest Rate on an ARM Is Determined.
The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
Margin
A percentage of the full price of a security that must be paid as a down payment by an investor buying on credit. The required margin fluctuates subject to federal regulations.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary