   
|
|
Margin
|
| FYI - For 2011, Dow up, Dogs of the Dow up more (double digits) |
| |
Margin is money borrowed from a broker for trading purposes. Brokers generally require additional disclosures for opening margin accounts, and charge interest when margin is used. Margin is commonly expressed as a percentage; an account 150% on margin, for example, holds $150 worth of positions for every $100 of actual cash in the account. Maintenance margin, the amount of margin required to hold an existing position, is regulated by the exchange where the asset is listed, and may differ from the initial margin mandated by the Federal Reserve. Margin requirements for holding positions overnight may be greater than margin requirements for opening and closing intraday positions.
Margin calls occur when an account falls below minimum maintenance level of 25% (or higher if so stated in the broker's margin agreement). Brokers will generally give the account holder a short period of time to reduce margin in a manner of their own choosing. If margin has not been sufficiently reduced, the broker will automatically liquidate positions at its own discretion.
Rate this margin definition...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: option premium, deferred revenue, annual return, per diem, inflation, 144a, Zero Cost Collar, current ratio, 1035 exchange, labor relations, retained earnings, 401a, liquidity ratio, irrevocable trust, Key Rate Duration, risk management, debt service coverage, balance sheet, deferred tax, quality assurance, dividends payable, class C shares, ex-dividend date, stock split, ex-dividend, 1031 exchange, command economy, reverse mortgage, stock market close, EBITDA, margin rate, LIBOR, required rate of return, FICO score, VIX, limit order, APR, minority interest, open position, implied volatility, average price per share, phantom income, FTSE, real GDP, diluted share, wholly-owned subsidiary, in escrow, cancelled check, covered put
|
|
| |