- /mahr"jin/, n.1. the space around the printed or written matter on a page.2. an amount allowed or available beyond what is actually necessary: to allow a margin for error.3. a limit in condition, capacity, etc., beyond or below which something ceases to exist, be desirable, or be possible: the margin of endurance; the margin of sanity.4. a border or edge.5. Philately. selvage (def. 3).6. Finance.a. security, as a percentage in money, deposited with a broker by a client as a provision against loss on transactions.b. the amount representing the customer's investment or equity in such an account.7. the difference between the amount of a loan and the market value of the collateral pledged as security for it.8. Com. the difference between the cost and the selling price.9. an amount or degree of difference: The measure passed by a margin of just three votes.10. Econ. the point at which the return from economic activity barely covers the cost of production, and below which production is unprofitable.11. Entomol. the border of an insect's wing.v.t.12. to provide with a margin or border.13. to furnish with marginal notes, as a document.14. to enter in the margin, as of a book.15. Finance. to deposit a margin upon.16. Stock Exchange. to purchase (securities) on margin: That stock was heavily margined during the last month.[1300-50; ME < L margin- (s. of margo) border; akin to MARCH2]Ant. 4. center.
* * *In finance, the amount by which the value of collateral pledged as security for a loan exceeds the amount of the loan.This excess provides the lender a "margin" of safety over and above the collateral offered and thus makes extending a loan a more attractive proposition. The size of the margin varies with the type of collateral, the stability of its market price, and the credit standing of the borrower. The term margin is also used in reference to securities transactions. When securities are purchased "on margin," the buyer supplies a percentage of the purchase price in cash, pledges the security as collateral, and borrows the remainder from the broker. The U.S. Federal Reserve Board (see Federal Reserve System) sets minimum margin requirements on loans made for the purpose of buying securities, so as to prevent excessive use of credit for speculation in stocks, as happened before the stock-market crash of 1929.
* * *▪ financein finance, the amount by which the value of collateral provided as security for a loan exceeds the amount of the loan. This excess represents the borrower's equity contribution in a transaction that is partly financed by borrowed funds; thus it provides a “margin” of safety to the lender over and above the collateral that is pledged. The size of the margin that is required varies with the type of collateral, the stability of its market price, expectations with regard to its future price, and the credit standing of the borrower.The term margin is used especially in connection with transactions in securities (security) and commodity futures. When securities are purchased “on margin,” the buyer supplies only a percentage, or margin, of the purchase price and borrows the remainder from his broker, pledging the security as collateral for the loan. A fall in the price of the security subsequent to the purchase reduces the margin available to the lender, and the customer may be called upon to restore his margin to a prearranged level. This level is determined by the lending broker but may not be below minimum levels stipulated by the organized exchange in which the transaction takes place.Minimum initial margin requirements on loans made for the purpose of purchasing securities are required in the United States by the Federal Reserve Board, under authority granted by the Securities Exchange Act of 1934. The purpose of the margin requirement is to prevent excessive use of credit for speculation in stocks. Dealings on margin are not allowed on British stock exchanges.
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