Margin Call
What is a Margin Call? A margin call occurs when the value of a margin account falls below the account’s maintenance margin requirement. It is a demand by a brokerage firm to bring the margin account’s balance up to the minimum maintenance margin requirement. To satisfy a margin call, the investor of the margin account...
Spread Trading
What is Spread Trading? Spread trading – also known as relative value trading – is a method of trading that involves an investor simultaneously buying one security and selling a related security. The securities being bought and sold, often referred to as “legs,” are typically executed with futures contracts or options, though there are other...
Stock Index
What is a Stock Index? A stock index, also called a share index or stock market index, consists of constituent stocks used to provide an indication of an economy, market, or sector. A stock index is commonly used by investors as a benchmark to gauge the performance of their portfolio. Examples of stock indexes include...
Tactical Asset Allocation (TAA)
What is Tactical Asset Allocation (TAA)? Tactical asset allocation (TAA) refers to an active management portfolio strategy that shifts asset allocations in a portfolio to take advantage of market trends or economic conditions. In other words, tactical asset allocation refers to an investment style in which asset classes such as stocks, bonds, cash, etc. are...
Initial Margin
What is Initial Margin? Initial margin refers to the percentage of equity a margin account holder must contribute to the purchase of securities. In other words, initial margin refers to the proportion of the total market value of the securities purchased that must be paid in cash by the investor. Understanding Initial Margin An investor...
