Margin


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Related to Margin: profit margin, margin call, Margin trading

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 ?
To keep a check on leveraged trades, the Emirates Securities and Commodities Authority allowed the brokerages to sell client shares if they don't cover any shortage in margin within two days of a margin call.
There are three types of margins applicable in equity markets -- the value at risk ( VaR) margin, the extreme loss margin and the mark to market ( MTM) margin.
Summary: Margins help counter the risk of unpaid transactions while trading in the market.
For study purposes, each specimen was considered to be a cube with 6 unique margin faces.
Averaging out reported figures from 37 papermaking companies that sell their stock on North American markets, the paper industry checks in with an average net profit margin of 0.
The move is aimed at making margin trading more accessible for individual investors as well as benefiting clients who trade large volumes via margin trading, kabu.
Margin = (Income-Costs) / Income, and is denominated in percent.
This results in your profit margin (100- 60-15+100=0.
A $500 million company that can increase its gross margin rate by 3 percent will add $9 million to the bottom line and $225 million in shareholder value (Figure 1).
The pathology report noted an area suspicious for a positive margin, and the patient underwent further resection of the area; subsequent pathologic examination failed to find any residual tumor.
lThe number of runners; with margins rising with the number of runners, although the effect is very small.
This means that patient cost predictions and margin analysis can be produced virtually instantaneously, including using portable computing devices.