margin
Sign in to savetype of financial collateral used to cover credit risk
~17 min read
Encyclopedic overview
In finance, margin is the collateral that a holder of a financial instrument has to deposit with a counterparty (most often a broker or an exchange) to cover some or all of the credit risk the holder poses for the counterparty. This risk can arise if the holder has done any of the following:
Borrowed cash from the counterparty to buy financial instruments,
Excerpted from Wikipedia’s “margin” article, available under the CC BY-SA 4.0 licence.