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LSDefine

Simple English definitions for legal terms

margin account

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A quick definition of margin account:

A margin account is a type of account that allows you to borrow money from a broker to buy stocks or other investments. This means you can invest more money than you actually have, but you also have to pay interest on the borrowed amount. A marginal note is a short note written in the margin of a printed document, like a law or a book, to help you understand what's written in the text.

A more thorough explanation:

A margin account is a type of account that allows investors to borrow money from a broker to purchase securities. The investor must put up a certain amount of their own money, called the margin, and the broker will lend them the rest. This allows the investor to buy more securities than they could with just their own money.

John wants to buy $10,000 worth of stock, but he only has $5,000. He opens a margin account with a broker and puts up $2,500 as the margin. The broker lends him the remaining $7,500. John now has $10,000 to invest in the stock market.

This example illustrates how a margin account can allow an investor to increase their buying power and potentially earn more profits. However, it also comes with risks, as the investor is borrowing money and must pay interest on the loan.

A margin note, also known as a sidenote, is a brief notation placed in the margin of a printed statute to give a brief indication of the matters dealt with in the section or subsection beside which it appears. These notes are usually in distinctive print for ease of reference.

In a printed copy of a law, there may be a margin note next to a section that says "Penalties for Violation." This note gives a brief indication of what the section is about, making it easier for readers to find the information they need.

However, it's important to note that margin notes cannot be used as the basis for an argument about the interpretation of a statute. They are simply a helpful tool for organizing and navigating the text.

marginable security | marginal revenue

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