Definition of Minimum margin:
Minimum margin is the initial amount investors are required to deposit into a margin account before trading on margin or selling short. Different margin trading accounts have their own minimum margins, though regulations establish the bare minimum. A margin account allows an investor to buy securities long or sell securities short on a line of credit extended to the investor by the broker.
The investor must make an initial deposit into the account to cover a certain percentage of the value of the securities the investor wishes to buy long or sell short. That minimum value must be maintained in the account while the long or short position is open.
Minimum amount of money deposited into a margin account as determined by brokers. This minimum margin amount must be deposited before investors can begin trading on margin or selling short.
How to use Minimum margin in a sentence?
- Minimum margin is the initial amount required to be deposited into a margin account before trading on margin or selling short. .
- Investors must make an initial deposit to cover a certain percentage of the value of the securities that are bought long or sold short, and that minimum value must be maintained while the position is open. .
- When you buy on margin, there are key levels—as governed by the Federal Reserve Board's Regulation T—that must be maintained throughout the life of a trade. .
- The New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) require investors to deposit a minimum of $2,000 in cash or securities to open a margin account, and some brokerages may require you to deposit more.
Meaning of Minimum margin & Minimum margin Definition