Margin

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Related to margins: profit margins

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 ?
Margin expansion was attributed to the company's increased focus on research and development (R and D) and its ability to effectively pass on price changes to customers.
In discretionary space, INDU reported profitability decline of 3 percent YoY mainly due to contraction in gross margins, down 297bps YoY to 14 percent.
A CSX press release on Thursday showed that Phnom Penh Autonomous Port was the only listed firm to show an increase in profit margins over the past three years.
Last year, the ECC led by then Prime Minister Shahid Khaqan Abbasi had increased the margins for OMCs and dealers by a cumulative 30 paisa per litre on diesel and petrol and deregulated the diesel pricing.
Also, dealer's margins were jacked up by 26 paisa per litre to Rs2.93 from the current Rs2.67 per litre.
Now, due to delay on the part of Federal Board of Revenue in establishing a mechanism for general sales tax (GST) collection under a deregulated system, the oil industry has managed to get the margins revised in line with an old Consumer Price Index (CPI)-based formula.
We also queried institutions with regard to the formal techniques used to sample margins in the laboratory, and the results are summarized in Table 5.
Tumour clearance of more than 5mm on permanent section from the resected specimen was taken as clear margins of excision, while tumour within <5mm of clearance, frank tumour at the margins, carcinoma in situ or dysplasia was taken as the positive margin and further resection was done.
And perhaps the best example of this trend is Amazon.com Inc., which has razor-thin margins, especially on many of its media products.
Marketing Margins of the Cotton Commission Agents (Rs.
According to a comment from the law firm Ropes and Gray, the SEC, unlike the CFTC and Federal Reserve, doesn't allow "nonfinancial entity counterparties to negotiate appropriate margin thresholds based on individual circumstances.
Margins are widely considered a barometer of hospital health.