margin

noun
mar·​gin | \ ˈmär-jən How to pronounce margin (audio) \

Definition of margin

 (Entry 1 of 2)

1 : the part of a page or sheet outside the main body of printed or written matter
2 : the outside limit and adjoining surface of something : edge at the margin of the woods continental margin
3a : 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
4a : 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
5 : measure or degree of difference the bill passed by a one-vote margin

margin

verb
margined; margining; margins

Definition of margin (Entry 2 of 2)

transitive verb

1a : to provide with an edging or border
b : to form a margin to : border
2a : to add margin to margin up an account
b(1) : to use as margin margin bonds to buy stock
(2) : to provide margin for margin a transaction
c : to buy (securities) on margin

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Other Words from margin

Noun

margined \ ˈmär-​jənd How to pronounce margined (audio) \ adjective

Examples of margin in a Sentence

Noun Please write your name in the left margin of the page. a book with wide margins Mountains lie at the city's northern margins. Verb the riverbed is margined by a flat beach of smooth rocks
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Recent Examples on the Web: Noun Though Brissett’s return could help spark this group, the team has the slimmest margin for error. Mike Jones, USA TODAY, "Opinion: These six NFL teams should start worrying about their playoff potential," 11 Nov. 2019 Not enough to lose to a Cal team that already had lost to Harvard, but enough for anyone to realize how razor thin UConn’s margin for error could be this season. Mike Anthony, courant.com, "Mike Anthony: UConn women have incomplete look in shaky opening victory over California," 11 Nov. 2019 What’s tough is that, with so many key players injured, Golden State faces a razor-thin margin for error. Connor Letourneau, SFChronicle.com, "Porous defense dooms Warriors against Utah as they lose fourth straight," 11 Nov. 2019 The result leaves Lampard's men sitting joint-top of group H alongside Ajax and Valencia, with all three sides tied on seven points, leaving little margin for error over the final two matches. SI.com, "Chelsea Enter Rarified Air With Astonishing Champions League Comeback Against Ajax," 6 Nov. 2019 But those late losses to Air Force and Arizona and USC erased the very slim margin for error this Colorado team had of earning a bowl berth. Mark Kiszla, The Denver Post, "Lunch Special: If Broncos QB Brandon Allen keeps winning, will Drew Lock not play this season?," 4 Nov. 2019 In a game where there was very littke margin for error, that was a tough sequence for New England. BostonGlobe.com, "Lamar Jackson was impressive in the early going, leading the Ravens to an early double-digit edge. And while the Patriots would close to 17-13 at the half, Jackson led an impressive pair of second-half drives that allowed Baltimore to get some separation from New England and pull away for the win.," 3 Nov. 2019 Its high prices and hefty profit margins for retailers—sometimes around 50-60%, according to Bloomberg Businessweek—have attracted suspicion from government authorities as well. Roberta Kwok, Quartz, "What companies don’t tell you about extended warranties," 1 Nov. 2019 Yet less than four months later the margin for the subsequent European Communities Act had shrunk to eight votes. The Economist, "The risk of no-deal has been postponed, not removed," 31 Oct. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'margin.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of margin

Noun

14th century, in the meaning defined at sense 1

Verb

1715, in the meaning defined at sense 1a

History and Etymology for margin

Noun

Middle English, from Anglo-French, from Latin margin-, margo border — more at mark

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Statistics for margin

Last Updated

15 Nov 2019

Time Traveler for margin

The first known use of margin was in the 14th century

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More Definitions for margin

margin

noun

Financial Definition of margin

What It Is

The term margin has two main definitions. The first refers to the ratio of profit to revenue. The second refers to money borrowed from a brokerage firm in order to leverage an investment.

How It Works

Margin as a Financial Ratio
Let's assume Company XYZ records $1 million in net income for 2008 and $10 million in sales. By using the formula described above, we can calculate that Company XYZ has a $1,000,000/$10,000,000 = 10% net profit margin. We can determine from this number that XYZ keeps 10% of the revenue it generates or for every $1 XYZ generates in revenue, it keeps $0.10 in profit.

Borrowing Money on Margin
Let's assume you have $2,500 and Company XYZ trades at $5 a share. In a regular brokerage account, you would be able to purchase 500 shares. If XYZ were to appreciate by $10, you would make $5,000 and earn a respectable 200% gain.

But with a margin account, you could essentially borrow money from the brokerage firm and collateralize the loan with the Company XYZ shares. Margin requirements for equities are normally 2 to 1 for the average investor, meaning you purchase double what your cash balance is.

With the $2,500 from the previous example, an investor with a margin account would be able to purchase $5,000 of Company XYZ or 1,000 shares. That same $10 price move would mean you now make $10,000 and earn a 300% return.

But margin is a double-edged sword, and losses are also magnified. Additionally, if the investor's equity in the account drops past a certain point, say 25% of the total purchase amount (called the maintenance margin), the brokerage firm may make a margin call, meaning that within a few days you must deposit more cash or sell some of the shares to offset all or part of the difference between the actual stock price and the maintenance margin.

Why It Matters

Financial Ratio
Margins measure efficiency. The higher the operating margin, the more profitable per dollar received a company's core business is.

Several things can affect operating margin (such as pricing strategy, prices for raw materials, or labor costs), but because these items directly relate to the day-to-day decisions managers make, operating margin is also a measure of managerial flexibility and competency.

It is also important to note that some industries have higher labor or materials costs than others. This is why comparing operating margins is generally most meaningful among companies within the same industry, and the definition of a "high" or "low" ratio should be made within this context

Borrowing Money on Margin
Margin accounts allow investors to make investments with their brokers' money. They act as leverage and can thus magnify and gains. But they can also magnify losses, and in some cases, a brokerage firm can sell an investor's securities without notification or even sue if the investor does not fulfill a margin call. For these reasons, margin accounts are generally for more sophisticated investors who understand and can handle the risks involved.

Source: Investing Answers

margin

noun
How to pronounce margin (audio)

English Language Learners Definition of margin

: the part of a page that is above, below, or to the side of the printed part
: the place where something (such as a piece of land) stops : the edge of something
: an extra amount of something (such as time or space) that can be used if it is needed

margin

noun
mar·​gin | \ ˈmär-jən How to pronounce margin (audio) \

Kids Definition of margin

1 : the part of a page or sheet outside the main body of print or writing
2 : border entry 1 sense 2 We walked along the margins of the forest.
3 : an extra amount (as of time or money) allowed for use if needed We have a margin of five minutes before the bus leaves.
4 : a measurement of difference They lost by a small margin.

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margin

noun
mar·​gin | \ ˈmär-jən How to pronounce margin (audio) \

Medical Definition of margin

1 : the outside limit or edge of something (as a bodily part or a wound)
2 : the part of consciousness at a particular moment that is felt only vaguely and dimly

margin

noun
mar·​gin | \ ˈmär-jən How to pronounce margin (audio) \

Legal Definition of margin

1 : the difference between net sales and the cost of the merchandise sold from which expenses are usually met or profits derived
2 : the amount by which the market value of collateral is greater than the face value of a loan
3a : cash or collateral deposited in a regulated amount by a client with a broker who is financing the purchase of securities — see also regulation t
b : a deposit made with a broker by a client who is trading in futures

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Comments on margin

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