Margin definition: Copy, customize, and use instantly
Introduction
The term "Margin" refers to the difference between the cost of acquiring an asset and its current market value or the funds available in an account to cover potential losses. In a financial context, margin often relates to the amount of equity an investor must maintain in their account when borrowing funds to trade. It plays a significant role in risk management, credit agreements, and ensuring the solvency of financial transactions.
Below are various examples of how "Margin" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Margin" as the difference between cost and value
This definition ties "Margin" to the difference between the cost of acquiring an asset and its current market value, reflecting a simple financial principle.
"Margin" means the difference between the purchase cost of an asset and its current market value, representing the potential profit or loss.
Definition of "Margin" as the equity in a margin account
This definition connects "Margin" to the equity maintained in an investor's margin account, ensuring the capacity to cover potential losses.
"Margin" refers to the amount of equity an investor is required to maintain in a margin account, ensuring sufficient funds to cover potential losses.
Definition of "Margin" as a lending requirement
This definition links "Margin" to the lending requirements imposed by financial institutions when providing credit.
"Margin" means the amount of funds that must be contributed by the borrower as collateral for a loan, expressed as a percentage of the total transaction value.
Definition of "Margin" as a collateral requirement
This definition applies "Margin" to the collateral required to secure a financial transaction, often in trading or loan agreements.
"Margin" refers to the collateral that must be provided to secure a loan or trade, ensuring that the borrower or investor can meet financial obligations.
Definition of "Margin" as the required percentage for a loan
This definition ties "Margin" to the specific percentage required by lenders to extend credit, typically in the form of a down payment or deposit.
"Margin" means the minimum percentage of a financial transaction or asset value that must be covered by the borrower, representing the portion of risk retained by the investor.
Definition of "Margin" as financial leverage
This definition connects "Margin" to the use of leverage in financial transactions, where borrowed funds are used to increase potential returns.
"Margin" refers to the use of borrowed funds to increase the investor’s exposure to a particular asset or financial position, amplifying both potential gains and risks.
Definition of "Margin" as the price difference in a transaction
This definition links "Margin" to the price difference in a transaction, highlighting the profitability of the deal.
"Margin" means the price difference between the cost of an asset and its selling price, determining the profitability of a transaction or trade.
Definition of "Margin" as a risk management tool
This definition applies "Margin" as a tool for managing risk, especially in financial markets and trading environments.
"Margin" refers to the amount of capital required to maintain a position in a market or trade, used as a risk management mechanism to prevent excessive losses.
Definition of "Margin" as trading capital
This definition ties "Margin" to the capital required by an investor to participate in trading, especially in leveraged positions.
"Margin" means the initial capital an investor must deposit to trade on margin, which allows them to control a larger position with less capital.
Definition of "Margin" as a buffer in investments
This definition connects "Margin" to a buffer or cushion in investments, ensuring there are adequate funds to cover potential downturns.
"Margin" refers to the buffer amount in an investor's account, acting as protection against market fluctuations and reducing the likelihood of a margin call.
Definition of "Margin" as a percentage of a trade value
This definition applies "Margin" to the specific percentage of a trade value that must be paid upfront or maintained as security.
"Margin" means the percentage of the total value of a trade or transaction that must be deposited or maintained by the investor, typically as collateral for a leveraged position.
Definition of "Margin" as the capital to avoid a margin call
This definition ties "Margin" to the capital required to prevent a margin call in leveraged trading scenarios.
"Margin" refers to the capital required to maintain a position in a margin account, ensuring that the account does not fall below the required minimum and trigger a margin call.
Definition of "Margin" as the spread in pricing
This definition connects "Margin" to the spread between the buying and selling price, often in financial markets or business transactions.
"Margin" means the spread between the cost price and the selling price, indicating the profit made on a transaction or sale.
Definition of "Margin" as a trading cost
This definition applies "Margin" to the cost of trading on borrowed funds, which could influence profitability.
"Margin" refers to the cost of trading with borrowed funds, where the investor's return is based on the amount borrowed compared to their own equity.
Definition of "Margin" as a performance indicator
This definition links "Margin" to its role as a performance indicator in business or financial analysis.
"Margin" means a measure of performance, calculated by comparing profit to revenue, highlighting how much of the revenue is retained after covering costs.
Definition of "Margin" as the difference in cost and selling price
This definition ties "Margin" to the difference between cost and selling price, specifically in business and trade contexts.
"Margin" refers to the difference between the cost of producing a good or service and its selling price, reflecting the profit margin on the sale.
Definition of "Margin" as a guarantee for a loan
This definition connects "Margin" to the guarantee or security a borrower must provide when obtaining a loan.
"Margin" means the guarantee or security, typically in the form of collateral or equity, that a borrower must provide to secure a loan or credit facility.
Definition of "Margin" as a mark-up on cost
This definition links "Margin" to the additional amount added to the cost of goods or services for profit.
"Margin" refers to the mark-up added to the cost of goods or services, ensuring a profit margin is achieved when selling the product or service.
Definition of "Margin" as a leveraged position
This definition applies "Margin" to situations where financial leverage is used to increase exposure to an asset or investment.
"Margin" means the use of leverage to control a larger position in an asset or investment, amplifying both potential returns and risks.
Definition of "Margin" as a financial cushion
This definition ties "Margin" to the concept of having a financial cushion to manage potential losses in investments or loans.
"Margin" refers to the financial cushion that ensures an investor has sufficient funds to cover potential losses, preventing the forced sale of assets.
Definition of "Margin" as risk retention
This definition links "Margin" to the amount of risk an investor or borrower retains in a financial arrangement.
"Margin" means the portion of risk retained by the borrower or investor, calculated as the difference between the total value and the amount financed through borrowing.
Definition of "Margin" as the profit per unit sold
This definition applies "Margin" to the profitability of a product or service on a per-unit basis.
"Margin" refers to the profit made on each unit sold, calculated as the difference between the selling price and the cost to produce or acquire the item.
Definition of "Margin" as the amount required for short-selling
This definition ties "Margin" to the amount required to conduct short-selling in financial markets.
"Margin" means the funds required to maintain a short position in an asset, ensuring that the investor can cover the potential costs of the short sale.
Definition of "Margin" as buffer capital for leverage
This definition connects "Margin" to the buffer capital needed to maintain leverage in financial markets.
"Margin" refers to the buffer capital an investor must maintain in their margin account to support leveraged trading positions.
Definition of "Margin" as a trading restriction
This definition applies "Margin" to restrictions imposed by brokers or institutions on leveraged trading.
"Margin" refers to the restrictions on trading that require an investor to deposit a certain amount of equity before engaging in leveraged transactions.
Definition of "Margin" as the amount for a futures contract
This definition ties "Margin" to the amount of collateral needed to enter into a futures contract.
"Margin" means the amount of money required to be deposited by the buyer or seller in a futures contract to cover the potential loss.
Definition of "Margin" as investment flexibility
This definition links "Margin" to the flexibility an investor has when using margin accounts to manage investments.
"Margin" refers to the flexibility granted to an investor by using borrowed funds, enabling them to adjust their positions and investments according to market movements.
Definition of "Margin" as leverage impact
This definition connects "Margin" to the impact of leverage in financial markets and its effect on return on investment.
"Margin" means the impact of using leverage on an investment, increasing the potential for both higher returns and higher losses.
Definition of "Margin" as capital required to meet obligations
This definition applies "Margin" to the capital required by an investor or borrower to meet financial obligations.
"Margin" refers to the capital an investor or borrower must have on hand to meet their obligations in a leveraged transaction, ensuring solvency.
Definition of "Margin" as interest rate impact
This definition ties "Margin" to the effect that interest rates have on the cost of borrowing in margin accounts.
"Margin" means the impact of interest rates on the cost of borrowing within margin accounts, influencing the overall profitability of leveraged transactions.
Definition of "Margin" as the gap in margin calls
This definition connects "Margin" to the gap between the required and available margin to avoid a margin call.
"Margin" refers to the difference between the required margin and the available margin in an account, helping to determine when a margin call will be triggered.
Definition of "Margin" as profitability in trading
This definition links "Margin" to profitability in trading, focusing on the relationship between costs and potential returns.
"Margin" means the amount of profitability in a trading position, calculated as the difference between the costs and returns generated from the trade.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.