|Buy on margin
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Definition of Buy on margin
Buy on margin
A transaction in which an investor borrows to buy additional shares, using the shares
The ratio of net income to net sales.
The ratio of net income before taxes to net sales.
A mortgage loan on newly developed property that the builder subsidizes during the
To purchase an asset; taking a long position.
To cover, offset or close out a short position. Related: evening up, liquidation.
A conditional trading order that indicates a security may be purchased only at the designated
To buy at the end of the trading session at a price within the closing range.
To buy at the beginning of a trading session at a price within the opening range.
A passive investment strategy with no active buying and selling of stocks from the
Mortgages in which monthly payments consist of principal and interest, with portions of these
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is
Another term for a repo.
A financial analyst employed by a non-brokerage firm, typically one of the larger money
The difference between variable revenue and variable cost.
Dollar safety margin
The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
Effective margin (EM)
Used with SAT performance measures, the amount equaling the net earned spread, or
Gross profit margin
Gross profit divided by sales, which is equal to each sales dollar left over after paying
Initial margin requirement
When buying securities on margin, the proportion of the total market value of
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use
Maintenance margin requirement
A sum, usually smaller than -but part of the original margin, which must
Management buyout (MBO)
Leveraged buyout whereby the acquiring group is led by the firm's management.
This allows investors to buy securities by borrowing money from a broker. The margin is the
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
A demand for additional funds because of adverse price movement. Maintenance margin
Margin requirement (Options)
The amount of cash an uncovered (naked) option writer is required to
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
Net operating margin
The ratio of net operating income to net sales.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses
Operating profit margin
The ratio of operating margin to net sales.
The margin needed to cover a specific new position. Related: margin, security deposit (initial)
Indicator of profitability. The ratio of earnings available to stockholders to net sales.
Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
An additional required deposit to bring an investor's equity account up to the initial margin
The amount added to a lower figure to reach a higher figure, expressed as a percentage of the higher figure, e.g. the margin that profit represents as a percentage of selling price.
The cost of producing one extra unit.
Margin of safety
A measure of the difference between the anticipated and breakeven levels of activity.
An intermediate measure of profit equal to sales revenue
gross margin, or gross profit
This first-line measure of profit
The profit per unit sold of a product after deducting product
Profit Margin Ratio
A measure of how much profit is earned on each dollar of sales. It
the difference between selling price and
contribution margin ratio
the proportion of each revenue dollar remaining after variable costs have been covered;
a decision that compares the cost of
margin of safety
the excess of the budgeted or actual sales
product contribution margin
the difference between selling price and variable cost of goods sold
product line margin
see segment margin
the ratio of income to sales
the excess of revenues over direct variable expenses and avoidable fixed expenses for a particular segment
total contribution margin
see contribution margin
The margin that results when variable production costs are subtracted
Revenues less the cost of goods sold.
The purchase of one business entity by another, largely using borrowed
The incremental change in the unit cost of a product as a result of a
leveraged buyout (LBO)
Acquisition of the firm by a private group using substantial borrowed funds.
management buyout (MBO)
Acquisition of the firm by its own management in a leveraged buyout.
marginal tax rate
Additional taxes owed per dollar of additional income.
Marginal Propensity to Consume
Fraction of an increase in disposable income that is spent on consumption.
Marginal Propensity to Import
Fraction of an increase in disposable income that is spent on imports.
Marginal Propensity to Save
Fraction of an increase in disposable income that is saved.
Marginal Tax Rate
Percent of an increase in income paid in tax.
EBITDA divided by total sales or total revenue.
Gross Profit Margin
Gross profit divided by revenue.
The purchase of items exceeding the quantity levels indicated
This is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement.
One of two parties to a conditional sale agreement, the other being the conditional seller.
Refers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount.
Margin Tax Rate
The tax rate applicable to the last unit of income.
The balance of a margin account. Related: buying on margin, initial margin requirement.
a. An option to buy a certain quantity of a stock or commodity for a
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