Margin is the security required from the borrower in all kinds of financial transactions. It protects lenders against the risk of a payment default. If a borrower fails to pay the amount owed on the due date, the lender can claim the collateral in order to minimise losses from the defaulted payment. Margin is a crucial element in loans and other financial instruments like forward or futures contracts, as it lowers the risk of default and limits the negative impact of any default to a transaction as well as, more generally speaking, to international trade and the financial markets.