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Buy on margin |
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Buy on marginBorrowing to buy additional shares, using the shares themselves as collateral.Buy on margin Similar MatchesUnmargined accountUnmargined accountA cash account held at a brokerage firm. Profit marginProfit marginIndicator of profitability. The ratio of earnings available to stockholders to net sales. Determined by dividing net income by revenue for the same 12-month period. Result is shown as a percentage. Also known as net profit margin. Margin of safetyMargin of safetyThe term given by Benjamin Graham, 'the father of value investing', to the idea that if you buy shares for less than two thirds of their net asset value, you automatically have a cushion against any deterioration in the company's trading position in the future. Put another way, 'buy cheap'.Graham's view was that it is extremely difficult to accurately predict a company's future earnings. For an investment to be 'safe', therefore, he liked to see a margin between the value of its net current assets and its share price. If the share price was below the net current assets divided by the number of shares in issue, he would consider buying it.One of the problems with Graham's approach is that in bull markets it is very difficult to find companies that fulfil his criteria. A second problem is that many of the fastest growing companies in modern economies are those whose assets are intangible - for instance, the value of their intellectual property. Under the Graham rubric, these sorts of assets would be excluded. Marginal rate of transformationMarginal rate of transformationThe increase in output of one good made possible by a one-unit decrease in the output of another, given the technology and factor endowments of a country; thus the absolute value of the slope of the transformation curve. Margin securityMargin securityA security that may be bought or sold in a margin account as defined in Regulation T. Further Suggestionsprofit marginoperating margin variation margin Marginal revenue Marginal efficiency of capital Marginal propensity to import Marginal Margin of safety OTC margin stock margin account Marginal tax rate Marginal rate of substitution marginal tax rate initial margin Original margin Dumping margin Margin account (stocks) Marginal propensity to consume Contribution margin Marginal value product Initial margin requirement Initial margin margin Margin requirement (options) Margin |
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