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Margin
Margin1) Borrowed money that is used to purchase securities, practice 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. RELATED TERMS-------------------------------------- Money A means of payment, especially coins and banknotes, although some definitions also include bank deposits, checks, etc. Purchase Buy; be long; have an ownership position. Securities Saleable papers, traded on stock exchanges, that yield an income (dividend, interest, etc.). Equity 1) Ownership interest in a firm. 2) The residual dollar value of a futures trading account, assuming its liquidation is at the going trade price. 3) In real estate, dollar difference between what a property could be sold for and debts claimed against it. 4) In a brokerage account, equity equals the value of the account's securities minus any debit balance in a margin account. 5) Shorthand for stock market investments. Market 1) The total demand for a good. 2) The set of all actual and potential buyers of a good or service. 3) The place where people buy and sell. 4) The process by which buyers and sellers of goods, services and factors of production interact to determine prices and quantifies. Value The worth or desirability of something expressed as an amount of money. Margin 1) Borrowed money that is used to purchase securities, practice 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. Account 1) In the context of bookkeeping, refers to the ledger pages upon which various assets, liabilities, income, and expenses are represented. 2) In the context of investment banking, refers to the status of securities sold and owned or the relationship between parties to an underwriting syndicate. 3) In the context of securities, the relationship between a client and a broker/dealer firm allowing the firm's employee to be the client's buying and selling agent. Price The cost of a good or service to the consumer. Cost The opposite of revenue. An expense that reflects the price of purchasing goods, services and financial instruments. A cash cost means that cash is given up today to the purchase. Also, the purchase price of an investment, which is compared to the sale proceeds to determine capital gain or loss. Production In the context of project financing, a defined portion of the proceeds of production up to a dollar amount. Interest The amount of money a lender loans a borrower to pay for using the borrower's principal. Mortgage A loan, usually to buy property, which serves as security for the loan; to take out a loan with a property as security. SIMILAR TERMS-------------------------------------- Margin account (stocks) A brokerage account in which the broker lends the customer cash to purchase securities. Margin agreement The agreement governing customers' margin accounts. Margin call A demand for additional funds because of adverse price movement. Maintenance margin requirement, security deposit maintenance. Margin department The department in a brokerage firm that monitors customers' margin accounts, ensuring that all short sales, stock purchases, and other positions are covered by the margin account balance. Margin of profit Gross profit divided by net sales. Used to measure a firm's operating efficiency and pricing policies in order to determine how competitive the firm is within the industry. Margin of safety The difference between price and value for a common stock. Margin requirement A performance bond paid upon purchase of a futures contract that protects the exchange clearinghouse from loss. Margin requirement (options) The amount of cash an uncovered (naked) option writer is required to deposit and maintain to cover his daily position valuation and reasonably foreseeable intraday price changes. Margin security A security that may be bought or sold in a margin account as defined in Regulation T. Margin stock Any stock listed on a national securities exchange, any over-the-counter security approved by the SEC for trading in the national market system, or appearing on the Board's list of over-the-counter margin stock and most mutual funds. Margin trading Buying securities, in part, with borrowed money. Marginal The margin is the range between the sale and purchase price or the range between debit and credit interest rate or with an Arbitrage, the price difference at the different trading places. Marginal cost The additional cost incurred by producing one more unit of a product. Marginal efficiency of capital The percentage yield earned on an additional unit of capital. Marginal product The increase in output resulting from the use of an additional unit of an input or factor of production. Marginal propensity to consume The proportion of additional disposable income that is spent on additional consumption. Marginal propensity to save The proportion of additional disposable income that people choose to save. Marginal revenue The change in total revenue resulting from increasing sales by one unit. Marginal tax rate The amount of tax paid on an additional dollar of income. As income rises, so does the tax rate. Marginal utility The additional satisfaction derived from consuming a further unit of a commodity. PREVIOUS AND NEXT TERMS-------------------------------------- Mandatory redemption schedule Schedule according to which bond sinking fund payments must be made. Manipulation Dealing in a security to create a false appearance of active trading, in order to bring in more traders. Illegal. Manufactured housing securities (MHS) Loans on manufactured homes-that is, factory-built or prefabricated housing, including mobile homes. Manufactured payment A tax concept whereby the lender of a stock receives the equivalent dividend payment from the borrower of the stock. Maple leaf A gold, silver, or platinum coin minted in Canada that usually trades at slightly more than its current bullion value. Margin Margin account (stocks) A brokerage account in which the broker lends the customer cash to purchase securities. Margin agreement The agreement governing customers' margin accounts. Margin call A demand for additional funds because of adverse price movement. Maintenance margin requirement, security deposit maintenance. Margin department The department in a brokerage firm that monitors customers' margin accounts, ensuring that all short sales, stock purchases, and other positions are covered by the margin account balance. Margin of profit Gross profit divided by net sales. Used to measure a firm's operating efficiency and pricing policies in order to determine how competitive the firm is within the industry. 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