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Security Deposit (Noun)

Meaning

The amount of collateral a customer deposits with a broker when borrowing from the broker to buy securities.

Classification

Nouns denoting possession and transfer of possession.

Examples

  • A customer typically provides a security deposit when trading on margin to cover the risk of a potential loss.
  • When a client opens a margin account with a brokerage firm, they must pay a security deposit as collateral.
  • Brokers may ask for a security deposit before allowing customers to engage in certain high-risk investment strategies.
  • To ensure timely repayment, brokers require clients to pay a security deposit upfront before using their services.
  • Investors must put a security deposit down on their brokerage accounts when borrowing funds for securities purchases.

Synonyms

  • Margin

Hypernyms

  • Down Payment
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