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