The term is used in margin trading, stock market, insurance and banking practice to refer to the difference between the prices of commodities, stocks, interest rates.

This is analogous to the concept of profit.

## The margin in the trading activities

The margin can be expressed both in absolutevalue (in ruble terms), and as a percentage (such as profit margins). In the latter case, it is calculated as the ratio of profit (the difference between price and cost) to the price. It should be distinguished from the margin trading margin. The latter is the ratio of the difference between the price and the cost to the cost.
In absolute terms, the margin - the difference between the selling price and the cost price.

Margin = ((price - cost) / price) * 100%.

The margin is a key factor in the analysispricing, effectiveness of marketing expenses, customer profitability. Most analyzes of the company is built on the basis of the gross margin. It is calculated as the difference between the company's revenues and variable costs to sales of products.

Gross margin = revenues from product sales - variable costs of production.

The size of the gross margin determines the net profit, which are formed from development funds.
In Europe, gross margin (gross margin) is understood somewhat differently - as a percentage of gross sales revenue, which remains with the company after it incurred direct operating costs.
There is also the concept of "profit margin", meaning the profit share in the revenue or profitability of sales.

## The margin in the exchange activities

The exchange activity Margin (Margin)It is a pledge, which allows you to receive money (commercial) loan to carry out speculative transactions in margin trading. Typically, it is expressed as a percentage of the transaction amount to the bail.
On the Forex Margin - security deposit,required to open positions. .. For example, when the amount of leverage at a rate of 1:20 for the purchase of 100 thousand dollars, the rest of the brokerage account must be at least 5 thousand dollars The higher the leverage, the less -.. The margin (collateral).

## The margin in the banking business

Margin divided into credit, banking, assurance. Credit margin means the difference between the real price and the amount issued in the hands of the borrower.
The banking margin is defined as the difference betweencredit and deposit rates. Also, to assess the profitability of the bank used the net interest margin - the difference between interest income from lending and investment and the rate paid on the equity and liabilities. This indicator allows you to draw conclusions about the effectiveness of capital investments.
With regard to the collateral loan guarantee is calculated the margin - the difference between the value of collateral and loan size.