May 3, 2011

All Margin Term And Definitions

MARGIN
 Dictionary of Accounting Terms
  1. see gross margin ; profit margin .
  2. partial payment made by an investor to a broker for securities purchased, with the remainder on credit. The broker retains the securities as collateral and charges the investor interest on the money owed. The Federal Reserve Board determines margin requirements. The margin requirement for stocks is higher than that for convertible bonds because of greater risk. Assume that with a margin requirement of 50% (present requirement), 100 shares of XYZ stock are bought at $100 per share. The actual amount invested is $5000, with a margin of $5000 on credit.
  3. in commodities trading, deposits required by commodities exchanges.
  4. in accounting, a reference to revenue or profitability. Examples are gross profit margin (gross profit/sales) and profit margin (net income/sales).
Dictionary of Finance and Investment Terms
 In general: amount a customer deposits with a broker when borrowing from the broker to buy securities. Under Federal Reserve Board regulation, the initial margin required since 1945 has ranged from 50 to 100 percent of the security's purchase price. In the mid-1990s the minimum was 50% of the purchase or short sale price, in cash or eligible securities, with a minimum of $2,000. Thereafter, minimum maintenance requirements are imposed by the National Association of Securities Dealers (NASD) and the New York Stock Exchange, and by the individual brokerage firm, whose requirement is typically higher.
Banking: difference between the current market value of collateral backing a loan and the face value of the loan. For instance, if a $100,000 loan is backed by $50,000 in collateral, the margin is $50,000.
Corporate finance: difference between the price received by a company for its products and services and the cost of producing them. Also known as gross profit margin.
Futures trading: good-faith deposit an investor must put up when buying or selling a contract. If the futures price moves adversely, the investor must put up more money to meet margin requirements.

 Dictionary of Banking Terms
 Banking
  1. Net Interest Margin , or the percentage difference between a bank's yield on earning assets (mostly loans) and interest paid to depositors.
  2. proportion of the asset pledged as security, for example, inventory or accounts receivable, that a bank will lend against. The difference between the market value and loan value is also called a haircut . If the collateral declines in value, additional margin will be required.
  3. premium a mortgage lender adds to an index rate in determining the loan interest rate in an adjustable-rate mortgage . This premium is typically two to three percentage points.
 Futures:money or securities put up as a good faith deposit assuring that a future contract will be fulfilled. Also known as a security deposit, as in the initial margin and maintenance margin required when a futures position is open.
Securities:money deposited with a broker that serves as partial payment when purchasing securities. The Federal Reserve Board's Regulation T sets a maintenance margin , currently 50%, in purchases or short sales of securities. Margins may be put up in cash or eligible securities. Individual broker-dealers may impose higher margins in trades of over-the-counter securities





Dictionary of Insurance Terms
fluctuation in claims arising from adverse selection*

*process in life insurance by which an applicant who is uninsurable, or is a greater than average risk, seeks to obtain a policy from a company at a standard premium rate. Life insurance companies carefully screen applicants for this reason, since their premiums are based on policyholders in average good health and in non-hazardous occupations.

 Dictionary of Marketing Terms
 Marketing:see gross profit ; markup .
Printing:space on a page between the copy and the edge of the page. The four margins are called, clockwise from the top, head margin, front margin, foot margin, and inside or back margin. bleeds are produced by printing into the margin up to or slightly beyond the point at which the paper sheet will be trimmed to page size. The gutter is the area between the margins of two pages on an untrimmed sheet.
 Dictionary of Business Terms
n general: amount a customer deposits with a broker when borrowing from the broker to buy securities.
Accounting: difference between gross and net amounts of income. See also margin of profit
.Banking: difference between the current market value of collateral backing a loan and the face value of the loan.
Communication: white space along borders of a printed page. See also footer ; header .
Corporate finance: difference between the price received by a company for its products and services and the cost of producing them. Also known as gross profit margin.
Economics: usefulness or cost of the next item.
Futures: good-faith deposit an investor must put up when buying or selling a contract. If the futures price moves adversely, the investor must put up more money to meet margin requirements.

Dictionary of Real Estate Terms

a constant amount added to the value of the index for the purpose of adjusting the interest rate on an Adjustable-Rate Mortgage .
Example: An adjustable rate mortgage is indexed to the 1 year Treasury yield and has a margin of 3 percentage points. If the index is currently 6%, the fully indexed rate on the loan is 9% (6% index plus 3% margin).

 Other Term and Definitions
profit margin
ratio of income to sales. (1) net profit margin equals net income divided by net sales. It indicates the entity's ability to generate earnings at a particular sales level. By examining a company's profit margin relative to previous years and to industry norms, one can evaluate the company's operating efficiency and pricing strategy as well as its competitive status with other companies in the industry. (2) gross profit margin equals gross profit divided by net sales. A high profit margin is desirable since it indicates the company is earning a good return over the cost of its merchandise sold.

average profit margin
  1. method of calculating the profit margin per item sold by applying an equal proportion of the total expenses of the seller against each item sold. It can be used to determine the benefit to be gained from advertising. For example, assume a $100 advertisement will generate 100 sales. Each items sells for $5 and costs $3 to produce and deliver, leaving a profit margin of $2. Since advertising will cost $1 per item sold, the average profit margin of $1 indicates that the item will be profitable after advertising expense.
  2. gross profit margin of a business enterprise averaged over a period of time. The gross profit margin is the annual net sales or revenues less the cost of goods sold.
 net profit margin
 net income as a percentage of net sales . A measure of operating efficiency and pricing strategy, the ratio is usually computed using net profit before extraordinary items and taxes-that is, net sales less cost of goods sold and Selling, General, and Administrative (SG&A) Expenses .

contribution profit margin
in cost accounting, excess of sales price over variable costs or expenses . This difference provides an amount to offset fixed costs and thereby contributes to gross profit .


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