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Initial margin requirement

• When buying securities on margin, the proportion of the total market value of the securities that the investor must pay for in cash. The Security Exchange Act of 1934 gives the board of governors of the Federal Reserve the responsibility to set initial margin requirements, but individual brokerage firms are free to set higher requirements. In futures contracts, initial margin requirements are set by the exchange.

 
 

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 Embedded terms in definition
 Cash
Exchange
Futures contracts
Futures contract
Futures
Initial margin
Investor
Margin requirement
Margin
Market value
Market
Reserve
Securities
Security
The exchange
 
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