BUYING ON MARGIN
Purchasing asset by paying the margin and funding the balance through a loan from a bank or broker. It is the down payment made to the broker for the asset being acquired. The marginable securities in the investor’s account act as the collateral for the borrowed funds. Before doing so, one has to open a margin account with the broker. In the United States, the amount of margin must be paid for a security regulated by the Federal Reserve Board.
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