Maintenance margin

Definition:

For derivative contracts, when the margin drops below the maintenance margin, the investor gets a margin call. The investor must post margin to the initial margin (which is higher than the maintence) or the contract will be liquididated.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Asset value

The net market value of a corporation's assets on a per-share basis, not the market value of the shares. A company is undervalued in the market when asset value exceeds market value.

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