- This allows investors to buy securities by borrowing money from a broker. The margin is the difference between the market value of a stock and the loan a broker makes. Related: security deposit ( initial). The New York Times Financial Glossary
* * *margin mar‧gin [ˈmɑːdʒn ǁ ˈmɑːr-] noun1. [countable, uncountable] ACCOUNTING the difference between the price that something is sold for and the cost of producing or buying it. A margin is usually calculated as a percentage of the price that something is sold for, unlike a Mark-Up which is calculated as a percentage of the cost of producing or buying it:
• Prices and margins were down as a result of the recession.margin on
• The margin on canned soup is 15% to 20%.
• a high-margin product.
• The car division, suffering from weak sales and tight margins (= very small ones ) , made an operating loss.ˌgross ˈmargin also ˌgross ˈprofit ˌmargin[countable] ACCOUNTING the difference between the price that a product or service is sold for and the cost of producing it, without including overhead S (= general costs not related to particular products or services ) :
• The company needed a gross margin of around 40% to make a reasonable profit.ˌnet ˈinterest ˌmargin [countable] BANKINGthe difference between the interest that a bank pays to those putting money in the bank and what it gets from those taking out loans; = SPREAD:
• Thanks largely to the widened net interest margin, profitability at many banks jumped in the latest quarter.ˌnet ˈmargin also ˌnet ˈprofit ˌmargin [countable] ACCOUNTINGthe difference between the price that a product or service is sold for and the cost of producing it, including overhead S (= general costs not related to particular products or services):
• The company's net margin neared 28%, making it one of the nation's most profitable industrial companies.ˈoperating ˌmargin also ˌoperating ˈprofit ˌmargin [countable] ACCOUNTINGthe difference between the price of a product or service and the cost of producing it. Operating margins are calculated by different companies in different ways, but are often similar to gross margin S:
• Phone usage by business customers offers carriers the highest operating margins.ˈprofit ˌmargin [countable, uncountable] ACCOUNTINGthe difference between the price of a product or service and the cost of producing it, or between the cost of producing all of a company's products or services and the total sum they are sold for:
• Slow sales have cut profit margins in the industry.2. on margin FINANCE if you buy shares or other investments on margin, you buy them with borrowed money:
• Individuals trading on margin sustained heavy losses during last year's stock price declines.
* * *Margin allows trading without having the full amount of funds available. It is a part-payment of collateral to cover contractual obligations and to insure against potential unlimited loss. Clearing houses in futures markets demand an initial margin from both the buyer and the seller of a futures contract to ensure they will be able to meet their contractual obligations. To ensure that margin requirements keep pace with subsequent market movements, variation margin is also called for. This is calculated by revaluing all positions with reference to the closing prices each day.
* * *margin UK US /ˈmɑːdʒɪn/ noun [C]► the amount by which one thing is more or less than another: by a margin of sth »
The president won the election by a tiny margin.a wide/large/comfortable margin »
They are the largest building society by a comfortable margin.»
a narrow/small/slim margina 40-vote/5-point/2-to-1, etc. margin »
On the New York Stock Exchange, declines outpaced gainers by a 4-3 margin.»
Kennedy's margin of victory was only 719,000.► ACCOUNTING, COMMERCE the difference between the total cost of making and selling something and the price it is sold for: a low/poor margin »
Intense competition leads to lower prices and margins.a high/good margin »
They wanted to produce higher margin products.a margin on sth »
The company will make a whopping 80% margin on this sale.»
Our increased profits are due to improved margins.► BANKING the difference between the amount of a loan and the value of the collateral (= property to be given to the lender if the money is not paid back): »
The risk of default needs to be correctly priced in the bank's loan margins.► FINANCE, STOCK MARKET money, shares, etc. that a client gives to a broker to hold, that protect the broker from loss on a contract● on margin — Cf. on margin
Financial and business terms. 2012.