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Glossary
Margin deposit
Definition
Funds that a trader must have in a margin account that represent a percentage of the current market value of the securities held by the trader.
Sellers of options must have additional funds in their accounts besides the option premium to protect against possible losses incurred by the market moving against the options position.
The required margin will vary according to the option type and whether the seller also has a position in the underlying asset.
Sellers of options must have additional funds in their accounts besides the option premium to protect against possible losses incurred by the market moving against the options position.
The required margin will vary according to the option type and whether the seller also has a position in the underlying asset.