Debit Balance


DEFINITION of 'Debit Balance'

In a margin account, money owed by the customer to the broker for funds advanced to purchase securities. The debit balance is the amount of funds the customer must put into his or her margin account, following the successful execution of a security purchase order, in order to properly settle the transaction.

BREAKING DOWN 'Debit Balance'

When buying on margin, investors borrow funds from their brokerage and then combine those funds with their own to purchase a greater number of shares than they would have been able to purchase with their own funds. The debit amount recorded by the brokerage in an investor's account represents the cash cost of the transaction to the investor.

  1. Maintenance Margin

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  2. Margin

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  3. Minimum Margin

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  4. Mark To Market - MTM

    1. A measure of the fair value of accounts that can change over ...
  5. Margin Call

    A broker's demand on an investor using margin to deposit additional ...
  6. Margin Account

    A brokerage account in which the broker lends the customer cash ...
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