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Margin
Updated
January 19, 2023
Margin Margin is the collateral that an investor must deposit with their broker or exchange to cover the credit risk that the holder provides to the broker or business. When an investor buys an asset on margin, they borrow the balance from a broker. The first payment made to the broker for the investment is referred to as buying on margin; the investor utilizes the marginal assets in their brokerage account as collateral. In broad business terms, the margin is the difference between the selling price of a product or service and the cost of production, or the profit-to-revenue ratio. Margin may also refer to the part of an adjustable-rate mortgage (ARM) interest rate that is added to the adjustment-index rate.
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