Margin

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Dictionary Says

Definition of 'Margin'

1. Borrowed money that is used to purchase securities. This practice is referred to as "buying on margin".

2. The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.

3. In a general business context, the difference between a product's (or service's) selling price and the cost of production.

4. The portion of the interest rate on an adjustable-rate mortgage that is over and above the adjustment-index rate. This portion is retained as profit by the lender.
Investopedia Says

Investopedia explains 'Margin'

1. Buying with borrowed money can be extremely risky because both gains and losses are amplified. That is, while the potential for greater profit exists, this comes at a hefty price - the potential for greater losses. Margin also subjects the investor to a number of unique risks such as interest payments for use of the borrowed money.

2. For example, if you hold futures contracts in a margin account, you have to maintain a certain amount of margin depending on how the market value of the contracts change.

3. Gross profit margin (which is the difference between revenue and expenses) is one measure of a company's performance.

4. The formula for calculating the interest rate on an adjustable-rate mortgage is the adjustment-index rate (e.g. Treasury Index) plus the percentage of the margin. For example, if the Treasury Index is 6% and the interest rate on the mortgage is 8%, the margin is 2%.
Search results for

'Margin'

  • Margin Trading: Introduction | Investopedia

    http://www.investopedia.com/university/margin/
    Investing on margin isn't necessarily gambling, but you can draw some parallels
    between margin trading and the casino. ... Margin Trading: Introduction. ...

  • Finding Your Margin Investment Sweet Spot

    http://www.investopedia.com/articles/financial-theory/08/margin-investing.asp
    Borrowing to increase profits isn't for the faint of heart, but margin trading
    can mean big returns. ... Finding Your Margin Investment Sweet Spot. ...

  • Spreading The Word About Portfolio Margin

    http://www.investopedia.com/articles/optioninvestor/09/portfolio-margin.asp
    Spreading The Word About Portfolio Margin. ... The traditional margin calculation is
    based on the dollar amount at risk (not the probability of loss). ...

  • Take On Risk With A Margin of Safety

    http://www.investopedia.com/articles/financial-theory/08/margin-of-safety.asp
    Take On Risk With A Margin of Safety. ... The margin of safety theory is a little different:
    argues that downward spikes of volatility make stocks less risky. ...

  • Series 7 Study Guide - Customer Accounts - Margin Accounts ...

    http://www.investopedia.com/exam-guide/series-7/customer-accounts/margin-account.asp
    ... Customer Accounts - Margin Accounts. Margin accounts are a type of brokerage account
    where the broker lends the customer cash to purchase securities. ...

  • Series 7 Study Guide - Customer Accounts - Managing Margin ...

    http://www.investopedia.com/exam-guide/series-7/customer-accounts/managing-margin-account.asp
    Investopedia's Series 7 Online Study Guide. In this section Regulation T, maintenane
    margin and CBOE requirements. ... Customer Accounts - Managing Margin Accounts. ...

  • The Advantages Of SPAN Margin

    http://www.investopedia.com/articles/optioninvestor/02/091802.asp
    Find out how it provides futures and commodity option strategists with more bang
    for their margin buck! ... The Advantages Of SPAN Margin. ... What Is Options Margin? ...

  • CFA Level 1 Study Guide - Securities Markets - Buying on Margin ...

    http://www.investopedia.com/exam-guide/cfa-level-1/securities-markets/buying-on-margin-maintenance-margin.asp
    ... Guide. Learn the process of buying stock on margin. Discusses the role
    of a brokerage firm and the possibility of a margin call. ...

  • How Does Your Margin Grow?

    http://www.investopedia.com/articles/optioninvestor/04/120904.asp
    Risk-management tool SPAN margin boosts profitability prospects by helping
    to determine when to exit a trade. ... How Does Your Margin Grow? ...

  • What is a margin account?

    http://www.investopedia.com/ask/answers/200.asp
    A margin account is an account offered by brokerages that allows investors
    to borrow money to buy securities. ... What is a margin account? ...

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