margin stock

Margin stock

Any stock listed on a national securities exchange, any over-the-counter security approved by the SEC for trading in the national market system, or appearing on the Board's list of over-the-counter margin stock and most mutual funds.

Margin Security

A security that one has purchased or sold on a margin account. A margin account is a brokerage account in which the brokerage lends the account holder money, which the account holder then uses to buy securities. Thus, a margin security is one that an investor buys with borrowed money. The fact that an investor is able to do this opens up investment opportunities that he/she might not otherwise be able to afford. More importantly, however, a margin security increases the possibility of a higher return and the risk of more losses. Margin securities are governed by Regulation T. See also: Margin call, Maintenance.

margin stock

A stock with qualifications such that it is considered to have loan value in a margin account. This kind of stock usually includes all listed stocks and selected over-the-counter stocks meeting Federal Reserve criteria. Stocks not on the margin list must be paid for in full. Also called OTC margin stock.