What is the initial margin?
When an investor buys investment securities such as stocks and bonds, they often receive a partial loan from brokerage to help it buy more. The initial margin, which is also called the initial margin requirement, is the percentage of the purchase price of shares that the investor must pay in his own money to invest in security. A margin requirement is an absolute minimum that the investor can put on an intermediary account to be an eligible trade for borrowed money from brokerage. Instead of cash, the investor can also use other marginal securities, also called liberated securities to meet the initial margin. If investment tanks and become worthless, the investor loses all the cash she has put on the account and ends up in the debt to the brokerage of securities. Investnebo using an initial loan to mediate the margin must ensure that in the worst case it commit more than it can afford.
through a brokerage account, the investor can trade in securities, which is financial investment. The types of securities include shares, bonds and associated debt assets such as loans. A brokerage account where an investor can trade borrowed money from brokerage is called a margin account. In the finance, the brokerage of securities is a company that supplies the middle party that will act as a mediator between the buyer and the seller when trading in securities. Securities brokers usually specialize in a specific type of safety.
In the world of investment, a broker acts as an agent for a transaction. The agent is a representative designated by an investor, which is also called the director. The agent carries out a transaction on behalf of the director. None of the director's assets, and they legally have to do what the investor tells them when it comes to the director's money. When they sign agreements with clients' directors, agents must legally register as agentsDirector. Agents are obliged to register their status on the stock exchange, in which they work before carrying out any securities stores on this stock exchange.
Federal Reserve, also known as a Fed, sets monetary policy in the United States. This Council determines the initial range, often about 50 percent of the total value of the purchase of securities. For an investor in the stock market, this means that they have to give half the value of the shares that they want to get the other half of the money for a share transaction as a loan from mediation. The value set by the Federal Reserve is only a minimum and the brokerage pages may require a higher percentage at their discretion.