Margining: meaning, definitions and examples
๐ฐ
margining
[ หmษหr.dสษชn.ษชล ]
financial trading
Margining refers to the practice of assessing and managing risk in financial markets by requiring accounts to maintain a minimum balance. This balance acts as collateral to cover potential losses on open trades. In essence, margining helps ensure that both parties involved in a transaction can fulfill their obligations. It is particularly crucial in futures and options trading where price volatility can lead to substantial fluctuations in account value. Reliable margining practices are essential for maintaining market stability.
Synonyms
collateral management, leverage, risk management
Examples of usage
- The investor received a margin call when their equity fell below the required level.
- Effective margining prevents systemic risks in financial markets.
- Brokerages implement margining to safeguard against default.
- Traders must understand the implications of margining on their overall strategy.
Translations
Translations of the word "margining" in other languages:
๐ต๐น margem
๐ฎ๐ณ เคฎเคพเคฐเฅเคเคฟเคจเคฟเคเค
๐ฉ๐ช Margin
๐ฎ๐ฉ margin
๐บ๐ฆ ะผะฐัะถะธะฝะฐััั
๐ต๐ฑ margines
๐ฏ๐ต ใใผใธใณ
๐ซ๐ท marge
๐ช๐ธ margen
๐น๐ท marj
๐ฐ๐ท ๋ง์ง
๐ธ๐ฆ ูุงู ุด
๐จ๐ฟ okraj
๐ธ๐ฐ okraj
๐จ๐ณ ่พน้
๐ธ๐ฎ margina
๐ฎ๐ธ mรถrk
๐ฐ๐ฟ ัะตะบ
๐ฌ๐ช แแแ แ
๐ฆ๐ฟ kษnar
๐ฒ๐ฝ margen
Etymology
The term 'margin' in finance originates from the Latin word 'margo', meaning 'edge' or 'border'. In the context of trading, it initially referred to the amount of money that investors needed to place in reserve as a safeguard against potential losses. The practice of margining began to take shape in the early 20th century with the growth of stock exchanges. As trading evolved and became more complex, especially with the introduction of derivatives like futures and options, the necessity for stringent margining practices increased. Regulatory bodies worldwide have since implemented specific rules surrounding margin requirements to protect market integrity and investor interests. This evolution reflects the changing dynamics of financial markets and the need for enhanced risk management strategies.