Collateral that may be used for a margin account. When one borrows funds from a broker in order to buy on margin, one must generally put up collateral in order to guarantee repayment. Very often the collateral is the security (or securities) bought on the margin account; however, certain low-priced stocks are sometimes not accepted as collateral and the investor must use some other collateral. The collateral a broker accepts is known as the eligible margin. See also: Restricted account.
Collateral that is specified by a firm or an exchange as acceptable for satisfying margin requirements. For example, certain low-priced stocks may not be acceptable as margin.