Trading margin meaning
A margin account is a loan account by a share trader with a broker which can be used for share trading. By contrast, if the margin-equity ratio trading margin meaning so low as to make the trader's capital equal to the value of the futures contract itself, then they would trading margin meaning profit from the inherent leverage implicit in futures trading. If the cash balance of a margin account is negative, the amount is owed to the brokerand usually attracts interest. The collateral for a margin account can be the cash deposited in the account or securities provided, and represents the funds available to the account holder for further share trading.
Brokerage houses followed suit and demanded trading margin meaning margin from investors". The margin-equity ratio is a term used by speculatorsrepresenting the amount of their trading capital that is being held as margin at any particular time. Margin buying refers to the buying of securities with cash borrowed from a brokerusing the bought securities as collateral.
In any event, the broker will usually charge interestand other trading margin meaning, on the amount drawn on the margin account. Thereafter, the collateral required until the position is closed is the maintenance requirement. This was one of trading margin meaning major contributing factors which led to the Stock Market Crash ofwhich in turn contributed to the Great Depression. The net value—the difference between the value of the securities and the loan—is initially equal to the amount of one's own cash used. For the film, see Margin Call film.
Margin requirements are reduced for positions that offset each other. The annualized ROM is equal to. This risk can trading margin meaning if the holder has done any of the following:. If a margin call occurs unexpectedly, it can cause a domino effect of selling which will lead to other margin calls and so forth, effectively crashing an asset class or group of asset classes. The net value—the difference between the value of the securities and the loan—is initially equal to the amount of one's own trading margin meaning used.