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Glossary

Navigate the complex world of currency management with our comprehensive dictionary of financial terms and definitions.

Margin

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.