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Margin Rate

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Margin rate has multiple financial meanings. The margin rate is the interest charged by a broker or agent for buying securities on margin (purchasing securities with borrowed money). The margin rate is a fee above and beyond a broker's call rate. A margin rate can vary and is dependent on a margin customer's account balance. The level of a brokers margin rate will also be impacted by the general level of interest rates which are influenced by factors such as inflation and the general state of the economy. There is also a gross margin rate, which represents gross margin (sales less the cost of sales) as a percent of sales. The gross margin rate shows what a firm makes on its cost of sales, revealing productivity and efficiency. Gross margin rate is also referred to as the gross profit margin rate. A firm that has a high gross margin rate has surplus cash to spend on other areas of the business, such as marketing and product development. The gross margin rate varies across businesses and industries.

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