Trading
Margin
The collateral required to open and maintain a leveraged trading position.
Definition
Margin is the amount of money a trader must deposit with their broker as collateral to open and maintain a leveraged position. Initial margin is the amount required to open a position, while maintenance margin is the minimum equity that must be maintained. If your account equity falls below the maintenance margin, you receive a margin call requiring you to deposit additional funds or close positions. In US stock trading, Regulation T requires 50% initial margin (2:1 leverage). Margin trading amplifies both gains and losses, making risk management critical.