Template:Margin loan: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "A '''margin lending transaction''' is one where one party lends money to another so it can buy or sell securities. Usually..." |
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A '''[[Margin lending transaction - SFTR Provision|margin lending transaction]]''' is one where one party lends money to another so it can buy or sell [[securities]]. Usually the [[borrower]] lets the [[lender]] hold the securities | A '''[[Margin lending transaction - SFTR Provision|margin lending transaction]]''' is one where one party lends money to another so it can buy or sell [[securities]]. The lender will lend up to a certain value of the securities. If the [[securities]] fall in value, the [[lender]] may ask the [[borrower]] to post [[margin]] to cover the value of the [[margin loan]]. | ||
Usually the [[borrower]] lets the [[lender]] hold the [[securities]] as collateral for the [[margin loan]]. The [[borrower]] may also allow the [[lender]] to [[Rehypothecate|use]] those [[securities]] in the market to offset its funding costs of making the [[margin loan]]. | |||
Latest revision as of 15:32, 7 November 2019
A margin lending transaction is one where one party lends money to another so it can buy or sell securities. The lender will lend up to a certain value of the securities. If the securities fall in value, the lender may ask the borrower to post margin to cover the value of the margin loan.
Usually the borrower lets the lender hold the securities as collateral for the margin loan. The borrower may also allow the lender to use those securities in the market to offset its funding costs of making the margin loan.