Buy on margin

Similar financial terms

Swap buy-back
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.

Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is held in a portfolio.

Management buyout (MBO)
Leveraged buyout whereby the acquiring group is led by the firm's management.

Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund ...

Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the early years of the development. The builder uses cash to buy down the mortgage rate to a lower level than the prevailing market loan rate for some period of time. The typical buydown is 3% of the interest-rate amount for the first year, 2% for the second year, and 1% for the third year (also referred to as a 3-2-1 buydown).

Buy in
To cover, offset or close out a short position.

Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated price or lower.

Buy on close
To buy at the end of the trading session at a price within the closing range.

Buy on opening
To buy at the beginning of a trading session at a price within the opening range.

Buy-and-hold strategy
A passive investment strategy with no active buying and selling of stocks from the time the portfolio is created until the end of the investment horizon.

Buydowns
Mortgages in which monthly payments consist of principal and interest, with portions of these payments during the early period of the loan being provided by a third party to reduce the borrower's monthly payments.

Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the same return.

Buyout
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is done with borrowed money.

Buy-back
Another term for a repo.

Buy-side analyst
A financial analyst employed by a non-brokerage firm, typically one of the larger money management firms that purchase securities on their own accounts.

Buyback
The covering of a short position by purchasing a long contract, usually resulting from the short sale of a commodity. Also used in the context of bonds. The purchase of corporate bonds by the issuing company at a discount in the open market. Also used in the context of corporate finance. When a firm elects to repurchase some of the shares that trade in market.

Management BuyIn (MBI)
This is when a small group of shareholders organise a take-over of a company and form a new management team. The opposite of a Management Buyout.

Variation margin
The variation margin is an extra margin required to bring the balance in a margin account up to the initial margin when there is a margin call.

Gross margin
The percentage of gross profit (sales minus direct costs) to sales, which should remain fairly consistent when sales rise or fall.

After-tax profit margin
The ratio of net income to net sales.

Profit margin
Indicator 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.

Original margin
The margin needed to cover a specific new position.

Operating profit margin
The ratio of operating margin to net sales.

Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.

Net operating margin
The ratio of net operating income to net sales.

Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.

Marginal
Incremental.

Margin requirement (Options)
The amount of cash an uncovered (naked) option writer is required to deposit and maintain to cover his daily position valuation and reasonably foreseeable intra-day price changes.

Margin of safety
With respect to working capital management, the difference between (a) the amount of longterm financing, and (b) the sum of fixed assets and the permanent component of current assets.

Margin call
A demand for additional funds because of adverse price movement. Maintenance margin requirement, security deposit maintenance

Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by the stock and, if the value of the stock drops sufficiently, the owner will be asked to either put in more cash, or sell a portion of the stock. Margin rules are federally regulated, but margin requirements and interest may vary among broker/dealers.

Margin
This allows investors to buy securities by borrowing money from a broker. The margin is the difference between the market value of a stock and the loan a broker makes.

Maintenance margin requirement
A sum, usually smaller than -but part of the original margin, which must be maintained on deposit at all times. If a customer's equity in any futures position drops to, or under, the maintenance margin level, the broker must issue a margin call for the amount at money required to restore the customer's equity in the account to the original margin level.

Before-tax profit margin
The ratio of net income before taxes to net sales.

Contribution margin
The difference between variable revenue and variable cost.

Net interest margin (NIM)
The difference between interest income and interest expense as a percentage of assets.

Equitize a Margin Call
An event whereby a previously unsatisfied margin call is eliminated by an effective transfer of ownership. In 1998, Long Term Capital Management transfered a portion of ownership to its creditors. In some respects, it was a debt for equity swap.

Variation Margin
Payment made on a daily or intraday basis by a clearing member to the clearing organization based on adverse price movement in positions carried by the clearing member, calculated separately for customer and proprietary positions.