Margin in a stock exchange refers to funds that speculators deposit with their brokers to protect the brokers against loss. The deposit safeguards the brokers, in case speculators lose money after they have bought stocks. It must cover the difference between the selling price of the stocks and the amount the brokers can borrow from a bank, plus an amount to cover possible losses that might result from stocks quickly changing prices. In the United States, the Federal Reserve System sets the amount of margin required.
