(1) The amount of money or securities that an investor must deposit with a broker to secure a loan from the broker. Brokers may lend money to investors for use in trading securities. To procure such a loan, an investor must deposit cash with the broker. (The amount is prescribed by the Federal Reserve System in Regulation T.) The cash represents the equity, or margin, in the investor's account. Example: The "Reg T" requirement is 50%. An investor has $2,500 and wants to buy General Electric common stock, presently trading at 62 3/8. The investor decides to deposit the $2,500 in an account with a broker as a Reg T requirement and borrow another $2,500 from the broker. With the total of $5,000, the investor buys 80 shares of GE common ($5,000 divided by $62.375). The investor's equity, or margin, in the account represents the difference between the value of the stock (a liability) and the cash deposit (an asset): $5,000 - $2,500 = $2,500 margin. (2) In futures, the amount of money deposited with the broker to protect both the seller and the buyer against default. To establish a position in commodities, a client must deposit cash with the broker; the amount, or rate of margin, depends on exchange regulations and other factors. If a price change causes a contract to lose dollar value, the broker must require additional cash for the price variation; this is variation margin. If the client cannot meet the requirement, the broker may liquidate the contract, using the cash as necessary to offset the losses. Example: The rate of margin is $1,000. The client deposits this amount of cash with the broker and buys a contract of soybeans (5,000 bushels). The market price drops 6