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margin

(1) in futures trading, a specific dollar amount, set by each exchange, that both buyers and sellers must deposit as a guarantee that both will perform as agreed to make or take delivery during a designated period of time. The deposit is held by the clearing organization of the exchange. (2) in stock transactions, margin refers to the down payment required when borrowing from a broker to finance the purchase of stock. In this case, margin requirements may be set by the Federal Reserve Board, the Board of Governors of the Exchange or the broker. The margin is expressed as a percentage of the purchase price.

Source : U.S. Department of the Treasury

Language : English

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