margin

Definitions (6)
Related Terms
1. Banking: (1) Difference between the market value of a collateral and amount of the loan advanced against it. Also called haircut. (2) Percentage added to a market rate of interest, or subtracted from a market rate of deposit, to provide a return to the bank.
2. Commerce: Difference between the cost price and selling price of a product.
3. Commodity trading: Difference between the spot price and forward price quoted for a commodity.
4. Currency trading: Difference between the spot price and forward price quoted for a currency.
5. Futures trading: Security deposit that buyers and sellers must place with the clearing house to guaranty they will perform as agreed (to make or take the delivery) on or before the futures contract's expiration date.
6. Securities trading: Difference between the amount of loan advanced by a stockbroker to a speculator and the current value of the securities deposited by him or her with the stockbroker as collateral.

Use 'margin' in a Sentence

Buying stock on margin can be risky, because the money the buyer is borrowing can lead to big losses if the market moves against him.
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The accountants were concerned about the loan being offered by the bank, but the CFO thought it was a reasonable margin, given the collateral.
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The company needed to either cut costs of production or raise sale price of the particular product to raise the margin amount because their bank accounts were being emptied.
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