Margin Amount is the difference between the total cost of the car and the loan amount sanctioned. This money has to be invested by the borrower prior to the release of the loan amount.
a cash deposit provided by a client as collateral to cover a forward position.
1. In commercial terms the difference between the cost of goods sold and the total net sales price. 2. The purchase of a stock or a commodity with payment of only part of the purchase price in cash (called the margin) and the balance by loan (usually made by the broker.)
Payment made by trader to the broker when a futures contract price moves unfavourably. A one cent per kilogram adverse price movement on one beef contract (10,000 kg) requires a $100 margin call to be met one the traders initial deposit has been exceeded.
An account with a broker where a client is able to purchase securities on credit after the margin has been deposited.
A sum of money required by a broker to initiate a trade.
This is a percentage of the total value of a transaction that a trader is required to deposit as collateral. Market Makers Organizations that maintain a firm bid and offer price in a given currency pair by standing ready to buy or sell at these executable prices (called making a market).
(1) In the futures industry, it is an amount of money deposited by both buyers and sellers of futures contracts to ensure performance against the contract. It is not a down payment. (2) In the stock market, the amount of cash that must be put up in a purchase of securities. If the margin requirement is 50%, the buyer must put up 50% of the purchase price; the buyer must borrow the rest.
The sum of the two main types of margin - initial margin and variation margin - which are monetary amounts reflecting the mark to market losses on open positions and potential losses on all positions and orders. TradeSports carries out limit checking that requires initial margin to be deposited before an order enters the order book. Note that margin is often used in its loosest sense to refer to initial margin only.
The part of a transaction's value that a customer must pay to initiate the transaction, with the other part being borrowed from the broker. The initial margin is set by the Federal Reserve System. The maintenance margin is the amount, established by brokers and exchanges, below which the actual margin actually go.
To buy on margin means to borrow money from a broker to buy securities. The margin is the amount you must deposit with the broker in order to borrow. The minimum is 50% of the purchase, or short sale price, in cash. So if you want to buy $10,000 in stock on margin, you have to put up at least $5,000 to make the purchase. Buying on margin poses the threat of not only losing your own money but the money you borrowed as well.
The amount of money required (a fraction) needed to maintain an open position. See leverage.
The amount paid by the customer when using a broker's credit to buy or sell a security. See buying on margin in the Stocks/Bond section for more detail.
Money that buyers and sellers of futures and exchange-traded options must put up with the clearinghouse to assure performance on the contracts. For over-the-counter options, margins are negotiated between the counterparties. In both cases, the amount of margin required varies with the price fluctuations of the underlying contract. Open positions are marked-to-market daily and, in times of extreme volatility, marked-to-market intra-day as well.
The amount of cash or other Eligible Collateral that the broker requires a Customer to deposit or maintain in the Customer's Account in connection with the Customer's trading activity.
The amount of funds required in a clients account in order to open a position or to maintain an open position. See " Margin" for further information.
Cash or guarantee deposited by a client wishing to trade
Sometimes a stockbroker will lend a customer money to buy stock. This loan is considered a margin account.
a deposit required by the exchange to insure performance
1. Money deposited as credit toward the purchase of securities. 2. The amount of equity in one's account.
The amount of money on deposit in your brokerage account to cover possible losses on the positions held in the account.
The minimum amount of money required to buy/sell a stock. This is using borrowed money.
Participants in futures markets are required to provide initial margin payments which would be sufficient to cover the worst probable one-day loss. These margins are typically set by the exchanges on which futures contracts are traded.
The amount of money supplied by an investor as a portion of the total funds needed to buy or sell a security, with the balance of required funds loaned to the investor by a broker, dealer, or other lender.
The required equity that a trader must post as collateral for a position.
The additional amount of loss that can be tolerated in a link.
The amount of money or securities that a client must deposit with a broker and against which the client can borrow when he or she wants to buy securities. To make such a loan, the broker must follow certain rules prescribed by the Federal Reserve System in Regulation T. The cash deposited with the broker represents the equity in the investor's account.
Partial payment for a security, involving full ownership rights and risks, with the balance financed, usually by a broker's loan. Minimum margin requirements are fixed by the Federal Reserve Board.
The amount of equity deposited with a firm against which the investor borrows. The credit limits are established by the Federal Reserve Board and the maintenance requirements are set forth by the National Association of Securities Dealers (NASD).
The amount a customer deposits with a broker when borrowing from the broker to buy securities.
1. Borrowing money to use specifically for buying securities of any kind in a brokerage account. 2. A measure of profitability of a company, like profit margin, operating margin or gross margin.
(also known as Performance Bond) Funds that must be deposited as a margin by a customer with his or her broker, by a broker with a clearing member, or by a clearing member, with the Clearing House. The margin helps to ensure the financial integrity of brokers, clearing members and the Exchange as a whole.
Amount payable by the client when he or she uses their broker's credit to buy a security.
The sum of assets, which can be deposited with a broker to secure loans for executing transactions.
The deposit required when entering into a position as well as to hold an open position. Your margin status can be monitored in the Account Summary.
(1) The amount of funds that must be deposited when purchasing securities. (2) For options : the sum required as collateral from the option writer. (3) For futures a deposit made to the clearing house on establishing a futures position account. (4) The percentage reserve required by the US Federal Reserve to make an initial credit transaction.
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.
The cash deposit against a paper contract payable as a guarantee. An initial payment is usually made and thereafter further margin requirements (margin call) may have to be met depending on the performance of the contract throughout it life.
The value of securities and cash in a brokerage account t an investor may borrow against in order to buy more securities.
Is the amount required to open a position. This amount is different for each futures market depending on each contract. Also, the dollar amount varies for each security and option account because of the variations in holdings among all accounts.
Is a deposit that opens a position i.e. a 1% margin gives you the right to open a $100,000 position with a $1,000 deposit.
A partial payment on investment units, the remainder of which is loaned by the trader. When investors buy on margin, they hope the price will go up fast enough to cover a loan, thereby increasing buying power. If prices drop, however, losses increase.
Customers must deposit funds as collateral to cover any potential losses from adverse movements in prices.
Debt incurred to buy stocks. Margin debt at NYSE member firms is published once a month by the NYSE about three weeks after the end of the month.
Clients who hold open positions require what is called margin. Margin is calculated as the amount of money you must have in your account to satisfy Larosspreads that you are able to honour your debt should your bet lose money.
(1) In futures trading, an amount set by each exchange that buyers and sellers must deposit as a guarantee of performance. (2) In stock transactions, the down payment required when borrowing from a broker to finance stock purchases. In this case, margin requirements are set by the Federal Reserve Board and are expressed as a percentage of the purchase price or market value. (3) In an adjustable rate mortgage, the spread between the index and the mortgage interest rate.
The amount of funds required in a clients account in order to open a position or to maintain an open position. The percentage of the contract value required as margin is inversely related to the leverage.
Total capital required to open up a position.
the amount of funds necessary to be in a customer's account for opening a position/maintaining an open position. 2% margin means that $2,000 of funds on deposit are necessary for a $200,000 position, etc.
Collateral (could be cash, securities and/or unrealized profit) that an investor is required to keep on deposit to cover potential losses. If the margin requirement is 10% and a speculator wishes to buy $1 million EURO/USD, that speculator must have $100 thousand EUROS in value in his/her account.
The deposit needed on your account in order to keep your positions open.
The amount of money or collateral that must be, in the first instance, provided or thereafter, maintained, to ensure against losses on open contracts. Initial must be placed before a trade is entered into. Maintenance or Variation margin must be added to initial to maintain against losses on open positions. Sometimes herein the amount that needs to be present to establish or thereafter maintained is sometimes herein referred to as necessary margin.
In the case of an investor who buys a security on credit, margin refers to that percentage of the full price of the security that must be paid as a down payment.
The difference between the current market value of collateral backing a loan and the face value of the loan. For example, if a $100,000 loan is backed by $50,000 in collateral, the margin is $50,000.
In banking, the margin compares the yield on assets to the cost of funding those assets (calculated by net interest income divided by average earning assets). In the securities industry, margin is the money and/or securities that an investor must deposit (or the equity in the account) with a broker as a security bond to ensure performance on a contract.
Financial safeguards to ensure that clearing members (usually companies or corporations) perform on their customers' open futures and options contracts. Clearing margins are distinct from customer margins that individual buyers and sellers of futures and options contracts are required to deposit with brokers. Within the futures industry, financial guarantees required of both buyers and sellers of futures contracts and sellers of options contracts to ensure fulfilling of contract obligations. FCMs are responsible for overseeing customer margin accounts. Margins are determined on the basis of market risk and contract value. Also referred to as performance-bond margin.
For currencies a deposit made to the forex firm on establishing a futures position account.
Margin is a sum required as collateral against losses in futures and options markets. In futures markets traders - whether they are buying or selling futures - are obliged to put up what's referred to as 'initial margin'. The 'initial margin' is set at an amount that reflects the maximum overnight change in the contract's value and is returnable. If the price moves against the trader the broker will ask for additional funds to maintain the ratio; a 'margin call'. The amounts that are added to and subtracted from the margin over the life of a contract are known as 'variation margin'. This process is called 'marking to market'. In options markets margin is the sum required as collateral against losses from the writer of an option i.e. from someone selling an option. If you're buying an option no margin is required.
allows investors to buy securities/assets by borrowing money from a broker/banker. The margin is the difference between the market value of a stock/asset and the loan a broker/banker makes.
A specified amount of money required by the forex dealer, exchange futures broker or Introducing Broker, to insure against potential losses from outstanding currency market positions. The Initial Margin is established by the various exchanges according to the SPAN formula. A 25 percent reduction establishes a Maintenance Margin level requirement. If a trader's account reaches the Maintenance Margin level, it triggers a margin call. The margin account must then be brought up to the Initial Margin requirement, or the broker/dealer has the right to liquidate all current positions.
The required equity that an investor must deposit to collateralize a position.
cash deposits required for a futures contract that serve as a good faith deposit guaranteeing that both parties to the agreement will perform the transaction at some point in the future.
An amount of money deposited by both buyers and sellers of futures contracts and by sellers of option contracts to ensure performance of the terms of the contract (the making or taking delivery of the commodity or the cancellation of the position by a subsequent offsetting trade). Margin in futures is not a down payment, as in securities, but rather a performance bond.
The use of borrowed money to purchase securities (buying "on margin").
A cash deposit in a client's account, which is necessary collateral for covering a forward position.
Margin is a cash deposit provided by clients as collateral to secure a trade and cover any losses (if any) that may result from adverse movements in exchange rates.
The amount of money needed to maintain a position.
Any of the following: A spare amount or measure or degree allowed or given for contingencies or special situations. A bare minimum below which or an extreme limit beyond which something becomes impossible or is no longer desirable. The difference which exists between net sales and the cost of merchandise sold and from which expense s are usually met or profit derived. [D02987] Webster In design, margin is the amount of design ed-in performance above expected operating performance. In qualification, margin is the measure of demonstrated performance above that required for normal handling and operation [D04137] CSM
An upfront payment made by the customer to take position in the market. His exposure limit is fixed based on the margin money brought in by him.
Margin refers to the ability of a customer to borrow money from his or her brokerage firm to buy securities. When customers buy stock on margin they pay a portion of the purchase price (generally 50%) and borrow the balance from the brokerage firm. After a investor purchases a stock on margin the NASD and NYSE requires such investor to have at least 25% of the value of the securities in his or her account at all times. Many firms require that equity level to remain even higher, at 30-40% of the account.
The amount of money that must be deposited in a derivatives trade to provide protection for both he parties dealing.
A satellite system requires certain minimum signal levels for operation. The amount that the the signal is over that minimum level is the margin.
The minimum amount of money required to buy or sell a security. The investor is using borrowed money.
The amount of money you are contributing when you borrow some of the money (against collateral) to buy an investment.
Payment required by the spread firms for spread bettors to keep a long term position open. Usually called for when a bet has turned against a client and a running position exceeds the client' credit limits.
A payment on account of a purchase, conferring ownership with its attendant risks and privileges upon the buyer, but subjecting the person to a lien on the purchase to the extent that credit is advanced to finance the full purchase price secured by the purchase
Margin in futures is a performance bond or "earnest money." Margin money is deposited by both buyers and sellers of futures contracts, as well as sellers of futures options. See Initial margin.
Margin allows investors to buy securities using borrowed money from a broker. The investor is charged interest for the loan. Margin requirements differ depending upon the type of transaction being made or the type of stock being purchased, e.g., selling puts, buying stock, credit spreads. Options are not generally marginable.
1] The return an intermediary achieves on the selling price of the article. That is, if the intermediary buys a product for $1 and sells it for $1.50, the margin is calculated. For example, .50 divided by $1.50, or 33%. [2] Also see valve margin.
The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.
The aggregate amount of customer cash pledged against the aggregate Open Position(s). The margin pledged is a function of Maximum Trading Leverage Ratio. The higher the leverage, the lower the pledged Margin. The lower the leverage, the higher the Margin needed to carry the position. Mathematically, Margin = Open Position Amount / Maximum Trading Leverage Ratio. For example, a USD/CHF 100,000 USD position at Maximum Trading Leverage Ratio 100:1 will require pledged Margin equal to 100,000/100 or $1,000. Note: To calculate margins for currency pairs, where USD is NOT the Base (First) Currency (e.g. EUR/USD, GBP/USD…) and crosses (EUR/JPY, GBP/JPY…), the Counter Currency amount is first converted into USD using the average exchange rate(s). Example: Customer buys 1 lot of EUR/USD when the price is 1.30. The average exchange rate is 1.30. Therefore, 100,000 EUR equals 130,000 USD. $130,000 / 100 Leverage Ratio = $1,300
Margin is a cash deposit provided by clients as collateral to cover possible future losses that may result from the clients Foreign Exchange trades.
A good faith deposit that must be in your margin account in order to place any trades.
The amount of signal in dB by which a satellite videoconference system exceeds the minimum levels required for operation.
The amount or percentage by which collateral value exceeds the value of the loaned security. The party that is accepting credit risk and price risk generally will require a margin of 2% on domestic loans (102%) and 5% on foreign loans (105%).
Also called security deposit. An amount of funds that must be deposited with the broker for each contract as a good faith deposit on the contract. Related: Security deposit (initial).
The interest rate charged when you buy stocks on credit.
Using securities you own as collateral to purchase other securities "on credit."
Using money borrowed from a broker/dealer, bank, o... Add a comment
A deposit contributed by a customer as a percentage of the current market value of the securities held in a margin account is thus the margin amount. This amount changes as the price of the investment changes.
The sum of money or securities, which must be deposited - and maintained - in order to provide to both parties a trade. The exchange establishes minimum performance margin accounts. Brokerage firms often require performance margin deposits that exceed ex-change minimums. In turn, they post and maintain customer performance margins with the Clearing Corporation. Option sellers can post Treasury Bonds or other approved collateral to satisfy initial performance margin requirements. Buyers of options do not have to post performance margins since their risk is limited to the option premium.
The amount of money paid by investors when they use their broker's credit to buy a security.
borrowed money used to buy stock.
Cash deposit provided by clients as collateral to cover losses (if any) that may result from the client's foreign exchange trades
Buying a stock or bond on borrowed funds. The margin is the amount the customer puts up.
An account in which a customer purchases securities on credit extended by a broker/dealer. Rules of the Federal Reserve Board and NASD govern margin accounts.
The amount paid by a client when he or she uses credit to buy a security, the balance being borrowed from a broker against acceptable collateral.
The amount of cash that FOREX.com requires Customer to deposit or maintain in Customer's Account as collateral for Open Position(s).
The margin is the funds you deposit with your chosen broker. These funds are the collateral that allows you to trade.
Funds that an option writer must maintain on deposit with his broker to assure his ability to fulfill his financial obligation to make or take delivery of the underlying shares. Buyers of equity options, because they pay the entire option premium when the option is purchased, have no further financial obligations and are not subject to a margin requirement. However, should an option buyer exercise his right to acquire the underlying shares, he would then become subject to the margin requirements applicable to the shares acquired. Margin is called from the time the option is exercised until the equity transaction is settled. Margin in respect of the equity transaction is called from both the seller and the buyer of the shares. (Note: equity and index options are the only LIFFE options for which the buyer pays the entire premium up front. Other options – i.e. options on futures contracts – are margined in the same manner as the underlying futures contracts.)
The amount deposited by buyers and sellers to insure performance on futures contracts. Option writers must also maintain a margin deposit account. If a futures or option writer's position is losing money, requests for additional money to maintain the margin deposit levels are termed "margin calls."
The required initial deposit of collateral to enter into a position or foreign exchange trade. This is held as a deposit on any running contract
Margin is a deposit provided by the customer as collateral to cover losses (if any) that may result from the customerâ€(tm)s foreign exchange trades.
Because of the foreign exchange risk on forward contracts, an acceptable collateral is required from the client.
In securities markets, the deposit a customer makes with a broker in buying securities (the broker extends credit for the rest of the price). In futures markets, a good-faith deposit or performance bond, placed with a futures commission merchant by a customer or with a futures clearinghouse by its members, to ensure that the depositor will meet financial obligations.
Using short-term borrowing within a brokerage account to buy securities.
1. The minimum amount that a client must deposit in cash or securities when borrowing to buy securities or trade in futures and options. 2. The difference in the purchase and sale price of a security.
To buy a security by borrowing funds from a brokerage house. The margin requirement-the maximum percentage of the investment that can be loaned by the brokerage firm-is set by the Federal Reserve Board.
The practice of purchasing securities in part with borrowed money, using the purchased securities as collateral in anticipation of an advance in the market price. If the advance occurs, the purchaser may be able to repay the loan and make a profit. If the price declines, the stock may have to be sold to settle the loan. The margin is the difference between the amount of the loan and the value of the securities used as collateral.
(1) Profit e.g. "Gross Margin". (2) "On Margin": To use credit to finance securities transactions. (3) "Account": An account established by a broker/dealer to extend credit (4) "Dept": The area of brokerage operations supervising the extension of credit.
Money or assets (such as T-bills) deposited into an account for the purpose of trading futures contracts. Margin can vary among different commodity futures contracts, it can be required when selling options, and must be maintained in accordance to exchange and FCM policy.
The initial amount or deposit required when entering into a position. Margin is a guarantee for future performance.
The minimum amount of cash or securities an investor has deposited with a broker to buy a security on credit. Investors usually do this when they are confident that the price of a security will go up. Rules of the Federal Reserve Board and NASD govern margin accounts. See shorting stocks.
An advance payment of a portion of the value of a transaction. If you buy on margin, you put up some of the cost of the purchase and borrow the rest. If the value of the margin account drops below the maintenance requirement, you must, in most cases, add cash or securities to the account to bring its value back to the minimum.
Borrowing money from your broker using your portfolio as collateral. Margin is usually used to purchase additional securities.
Additional deposit required from a client when the futures price moves against the position, so that the client would show a loss if the contracts were liquidated at the current price.
"Buying on margin" means buying securities with money borrowed from a broker/dealer. It allows you to buy certain securities using the assets in your account as collateral for the loan. Margin can also mean the amount of equity required to buy securities purchased on credit.
Money that must be deposited by participants in options and futures markets as a guarantee that they will be able to meet their commitments at the due date.
In commodities, an amount of money deposited to ensure fulfillment of a futures contract at a future date.
The amount of funds required in a clients account in order to open a position or to maintain an open position. For example, 1% margin means that $1,000 of funds on deposit are required for a $100,000 position.
The amount paid by the customer when using a broker's credit to buy or sell a security. Under Federal Reserve regulations, the initial margin requirement since 1945 has ranged from the current rate of 50 percent of the purchase price up to 100 percent. (See: Brokers' Loan, Equity)
Purchasing Treasury and agency securities with money borrowed from a bank or brokerage.
The amount of money or collateral deposited by a customer with his or her broker, by a broker with a clearing member or by a clearing member with the Clearing House, for the purpose of insuring the broker or Clearing House against loss on open futures or options contracts. The margin is not a part payment on a purchase. (See: "Performance bond") Initial margin is the total amount of margin per contract required by the broker when a futures position is opened; Maintenance margin is a sum which must be maintained on a deposit at all times. If a customer's equity in any futures position drops to or under the maintenance level because of adverse price action, the broker must issue a margin call to restore the customer's equity. Consult the CME Clearing House for margin requirements for specific contracts
A payment made by buyers and sellers of exchange traded futures contracts and writers of exchange traded options to demonstrate their ability to cover their potential losses on their position. The payment is made to the relevant clearing house. See also Initial Margin, Variation Margin, Maintenance Margin and Intraday Margin.
(1) Profit e.g., Gross Margin. (2) On Margin: The use of credit to finance securities transactions. (3) Account: An account established by a broker-dealer to extend credit to a customer.
Literally, the collateral required to purchase securities or derivatives on credit. More generally, the use of credit to buy securities, as in 'buy on margin'. Initial margin is the collateral required to purchase or short sell an instrument. Variation margin is the 'top up' required if the value of a position falls below its required level of collateralization.
1) A loan from a broker to buy stock, hence buying stock “on margin.” Loan is usually up to 50% of the price of the stock purchased; 2) Good-faith deposit on a futures contract.
Initial margin is the amount required to be put up as collateral by the option writer to the clearing corporation. It is equivalent to a performance bond. Variation or maintenance margin is further cover required, should the option position move against the writer.
a. Using money borrowed from a broker to purchase securities. b. The difference in the purchase and sale price of a security.
Using borrowed money from a brokerage house to buy additional securities.
Money held in an account as a good faith deposit for the use of leverage.
A deposit required before opening a futures, forward or option contract.
The amount deposited per contract at the start of the trade.
A sum that must be maintained on deposit throughout the life of the trade.
Partial payment for a security involving full ownership rights and risks with the balance financed typically by a brokerage.
(1) In banking, the difference between the bank’s interest rate applied on lending and that applied on deposits (also known as spread).(2) On the exchange market, the difference between the market value of a security and the loan which investors can raise through a broker, where the loan funds will be used to purchase such a security.(3) The lending limit, a percentage of the total assets pledged for Lombard loans. Français: Marge Español: Margen
The amount of equity required to be deposited in an account carried on credit. (See Loan Value
The amount that must be deposited in the account in the form of cash or eligible securities. The deposit is required to protect the broker against the risk of loss.
means Deposit Margin and/or Maintenance Margin.
The amount of money or collateral deposited by a customer with his broker, or deposited by a broker with a clearing member, or by a clearing member with the clearinghouse, for the purpose of insuring the broker or clearinghouse against adverse price movement on open futures contracts. The margin is not partial payment on a purchase. 1) Initial margin is the minimum deposit per contract required by the broker when a futures position is opened. 2) Maintenance margin is a sum which must be maintained on deposit at all times. If the equity in a customers' account drops to, or under, that level because of an adverse price movement, the broker must issue a margin call to restore the customers' equity. Margins are set by the Exchange based on its analysis of price risk volatility in the market at that time. See variation margin.
Different stock brokers offer options where you can borrow money from them with the idea that your stock will go up and you can pay it back. This is called buying on margin. You must sign an agreement that says that if the stock goes down, you will pay the broker back.
a) A deposit left to an exchange or clearing house as collateral to cover hostile movements in market prices of an open position; or b) The difference between the purchase and sale rates of a foreign exchange quotation.
An investor's equity in the securities in his or her account. The margin purchaser puts up a portion of the value of the securities, borrowing the remainder from the investment dealer.
In stock trading, an account in which purchase of stock may be financed with borrowed money; in futures trading, the deposit placed with the clearinghouse to assure fulfillment of the contract. This amount varies daily and is settled in cash.
The amount of money or collateral deposited by a client with a broker, or by a clearing member with the clearinghouse, as required by the exchange and/or clearinghouse for open futures positions. (1) Initial margin is the total amount of margin per contract required by the broker when a futures position is opened by a customer; (2) maintenance margin is the minimum amount of money per contract that must be maintained on deposit at all times the position is open.
A good faith deposit a speculator gives to his broker prior to initiating his first trade.
Money representing a performance bond by trader placed and maintained with broker. Funds that must be deposited as a performance bond by a customer with his or her broker, by a broker with a clearing member, or by a clearing member, with the Clearing House. The performance bond helps to ensure the financial integrity of brokers, clearing members and the Exchange as a whole.
Money from a client that is held on deposit by Jameson International to ensure that the client will honour the terms of a spot/forward contract.
The amount paid by the customer when using a broker's credit to buy or sell a security. Under Federal Reserve regulations, the initial margin required since 1934 has ranged from 40% of the purchase price up to 100%. Since 1974 the current rate of 50% has been in effect. (see Brokers' Loans, Equity)
With regard to securities, this term refers to a fractional amount of full value, or the equity outlay (down payment) required for an investment in securities purchased on credit.
The amount an investor deposits with a broker when borrowing from the broker to buy securities. Margins usually range from 50% to 100% of the security's price. back to the top
An advance payment of a portion of the value of a stock transaction. The amount of credit a broker or lender extends to a customer for stock purchase.
The amount paid by a client when he uses credit to buy a security, the balance being loaned by his broker against acceptable collateral.
In an adjustable rate mortgage, the amount added to the interest rate index, to calculate the new indexed interest rate. Also, borrowing money from a broker to purchase securities.
Customers need to deposit funds as security to cover any possible losses from adverse movements in prices.
In the futures/commodity markets, a margin is a good faith deposit (of money, securities or other financial instruments) required by the futures clearing system to ensure performance.
This 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).
A percentage of the total value of a transaction that a trader is required to deposit as collateral. Buying on margin refers to investing with borrowed funds, and the margin requirement insures against heavy losses.
(1)Difference between the buying and selling rates, also used to indicate the discount or premium between spot or forward. (2)For options the sum required as collateral from the writer of an option. (3)For futures a deposit made to the clearing house on establishing a futures position account. (4) The percentage reserve required by the US Federal Reserve to make an initial credit transaction.
The amount of money needed to deposit with your CFD broker in order to fund a position. With margined products only a percentage of the nominal value has to be lodged in cash, normally between 5-20
"On Margin"--a process whereby a brokerage client uses credit to finance securities transactions. See: Buying On Margin; Buying Power; Credit Balance; Customer's Net Debit Balance; House Rules; Maintenance Call; Margin Account; Margin Agreement; Margin Call; Margin Department; Margin Requirement; Margin Secu rity; Special Miscellaneous Account
Purchasing stocks with money borrowed from a broker.
an investor buys on margin when he or she borrows money to buy stock
The minimum amount that a client must deposit in cash or securities, when borrowing to buy securities or trade in futures or options. In futures markets a deposit normally equivalent to 10% of the contract value is required.
(i) In equity markets, the amount paid by the customer when he/she uses his broker's credit to buy a security. (ii) For options, the sum required as collateral from the writer of an option. (iii) For futures, a deposit made to the clearing house on establishing a futures position.
The amount of money that a customer must deposit with a broker to secure a loan from that broker. In the case of futures, the amount of money that must be deposited to protect the buyer and seller from default.
The amount of money or collateral deposited by a customer with his broker, by a broker with a clearing member, or by a clearing member with a clearing organization. The margin is not partial payment on a purchase. Also called Performance Bond. (1) Initial margin is the amount of margin required by the broker when a futures position is opened; (2) Maintenance margin is an amount that must be maintained on deposit at all times. If the equity in a customer's account drops to or below the level of maintenance margin because of adverse price movement, the broker must issue a margin call to restore the customer's equity to the initial level. See Variation Margin. Exchanges specify levels of initial margin and maintenance margin for each futures contract, but Futures Commission Merchants may require their customers to post margin at higher levels than those specified by the exchange. Futures margin is determined by the SPAN margining system, which takes into account all positions in a customer's portfolio.
Buying a security on margin occurs when you borrow money against the equity in your account to buy a security. The amount you borrow is also referred to as a "debit balance." A margin call will occur if the market value of the securities in your account falls below required maintenance levels.
The difference between the current market value of the collateral and the amount of the loan.
Borrowed money that is used to purchase securities. This practice is referred to as \'buying on margin\'. Full margin, also called 50% margin, is the maximum leverage allowed and signifies that out of every dollar invested 50 cents are borrowed money.
The difference between the market value of collateral pledged to secure a loan and the face value of the loan itself.
Buying on margin means that the investor borrows money from a broker to buy a security. Investors usually do this when they are confident that the price of a security will go up. For example, suppose you want to buy 200 shares of a stock that costs $20 per share. Normally, you would need $4,000 (plus commission) to purchase this security. But if you buy the security on margin, you can borrow up to $2,000 (50%) of the purchase price and pay the other $2,000 yourself. If the value of the stock goes up, you earn all the gains on the$4,000 investment, even though you borrowed half of the initial investment. At some point, of course, you need to pay back the borrowed amount to the brokerage, which charges interest for the amount you have borrowed. If the value of the stock falls, however, you will owe the brokerage for the losses. If the value of the stock falls too far, the brokerage may give you a margin call
In finance, a margin is collateral that the holder of a position in securities, options, or futures contracts has to deposit to cover the credit risk of his counterparty.