margin requirement

margin requirement definition - finance
The minimum amount of money that a client must have on deposit, either in cash or approved securities, in a margin account at a brokerage office. Margin requirements for stock trading are governed by the Federal Reserve through Regulation T. Generally, investors are required to have a minimum margin of 50 percent of the purchase price of securities or 50 percent of the proceeds of short sales. Also called initial margin.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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