Minimum Margin Definition

Learn the definition of minimum margin and other ETF terminology from the etf.com glossary.

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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Learn more about Minimum Margin

Minimum Margin, a critical consideration in ETFs, denotes the lowest threshold of cash or securities that investors must maintain in their brokerage accounts to participate in margin trading. Margin trading enables investors to amplify their potential returns by borrowing funds to purchase additional shares, albeit with increased risk. Adhering to the minimum margin requirement is essential for investors, as falling below this threshold may trigger forced liquidation of assets. This safeguard aims to ensure that investors engaging in margin trading have sufficient resources to cover potential losses, contributing to responsible and risk-aware participation in the ETF market.

Related Terms

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.