Margin (finance)

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Summary

In finance, margin is the collateral that a holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty.

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mechanism enabling high-risk speculative leverage
Buying on margin allows speculators to borrow funds to increase their position size, significantly amplifying both potential gains and the risk of catastrophic loss.
SourcesWikipedia Wikidata Wikipedia Wikidata
collateral requirement for maintaining futures positions
Because futures are leveraged, traders must maintain a margin account with sufficient collateral to cover potential losses, which is a critical operational aspect of the contract.
SourcesWikipedia Wikidata Wikipedia Wikidata

SourcesWikipedia

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