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Definition of MARGIN
: the part of a page or sheet outside the main body of printed or written matter
: the outside limit and adjoining surface of something :edge<at the margin of the woods><continental margin>
a: a spare amount or measure or degree allowed or given for contingencies or special situations <left no margin for error>
b (1): a bare minimum below which or an extreme limit beyond which something becomes impossible or is no longer desirable <on the margin of good taste>(2): the limit below which economic activity cannot be continued under normal conditions
c: an area, state, or condition excluded from or existing outside the mainstream <the margins of critical discourse — Barbara L. Packer><living in society's margins>
a: the difference which exists between net sales and the cost of merchandise sold and from which expenses are usually met or profit derived
b: the excess market value of collateral over the face of a loan
c (1): cash or collateral that is deposited by a client with a commodity or securities broker to protect the broker from loss on a contract (2): the client's equity in securities bought with the aid of credit obtained specifically (as from a broker) for that purpose
d: a range about a specified figure within which a purchase is to be made
: measure or degree of difference <the bill passed by a one-vote margin>
: the outside limit or edge of something (as a bodily part or a wound)
: the part of consciousness at a particular moment that is felt only vaguely and dimly
In finance, the amount by which the value of collateral pledged as security for a loan exceeds the amount of the loan. This excess provides the lender a margin of safety over and above the collateral offered and thus makes extending a loan a more attractive proposition. The size of the margin varies with the type of collateral, the stability of its market price, and the credit standing of the borrower. The term margin is also used in reference to securities transactions. When securities are purchased on margin, the buyer supplies a percentage of the purchase price in cash, pledges the security as collateral, and borrows the remainder from the broker. The U.S. Federal Reserve Board (seeFederal Reserve System) sets minimum margin requirements on loans made for the purpose of buying securities, so as to prevent excessive use of credit for speculation in stocks, as happened before the stock-market crash of 1929.