Business and Personal Finance Dictionary

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• MARGIN ACCOUNT
  
  Margin accounts are brokerage accounts that allow you to pay for part of the cost of buying stock with money that you, in effect, borrow from your broker. You use the account to buy on margin, sell short, or day trade. To open the account, you must make a minimum deposit of at least $2,000. To use the account to buy on margin, you must have a balance of cash and securities equal to 50% of the purchase you wish to make. If you use a margin account to buy on margin or sell short, you pay interest on what you borrow but don't have to repay the loan until you sell the stock-ideally, at a large enough profit to cover the interest. If the value of the stock that you bought on margin or sold short declines, and you don't have enough assets in your account to cover the margin requirement, you may get a margin call from your broker.
  
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