Margin

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Margin

Allows investors to buy securities by borrowing money from a broker. The margin is the difference between the market value of a stock and the loan a broker makes. Related: Security deposit (initial). In the context of hedging and futures contracts, the cash collateral deposited with a trader or exchanged as insurance against default.

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.

margin

1. The amount of funds that must be deposited when purchasing securities. See also initial margin requirement.
2. The equity in an investor's account. See also maintenance margin requirement.

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.

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.

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.
References in periodicals archive ?
which order in some percelles will do greate ease, for happely a man maye bye or sell, at one instant many percelles of or to some one man, then by this order of repartinge, there needes but one somme in the margent of the Leager, for the creditour or debitour to aunswere a nomber of percelles eyther in debitour or creditour as the case requireth.
James Black finds in Hamlet evidence of Shakespeare's interest in and familiarity with the Geneva Bible's marginal glosses, quoting Horatio's "I knew you must be edified by the margent ere you had done" in Edified by the Margent: Shakespeare and the Bible (U.
fine stamell cloth, with a gray cotten wraper, the which are marked as in the margent The brode clothes stand me with all charges twelue pounds a cloth, and I hope they will yeld you in Lisbon about 52.