Margin

In brief: Deposited security for leveraged positions.

Meaning in practice

For futures, CFDs and margin loans, the broker requires a margin as security. If the account falls below the maintenance margin, there is a risk of a margin call and forced liquidation – one of the most common reasons for sudden total losses.

Context for investors and traders

For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.

How to use this in practice

Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.

What to keep in mind

Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.