Margin


The cash or securities contributed by a purchaser in part payment for the securities held in a margininfo-icon account. The remainder is normally loaned by the brokerage house through which the trade is made. Securities bought, in part, with money loaned by a broker are said to have been bought 'on margin'. When a trade is first made, the purchaser pays an initial margininfo-icon. To ensure that margin requirements keep pace with any subsequent losses account holders may have to pay variation margininfo-icon to bring the account up to initial margin requirements. This is calculated by revaluing all positions with reference to the previous day's closing price. It is sometimes referred to as maintenance margin.