margin

The margin ( French "range", "freedom" , from Latin margo, "margin" ) ( maʀʒə ) is in the business the name of profit margins of all kinds as well as in communications technology , the name for various signal parameters.

General

Usually the word is used colloquially, because the individual subject areas often use technical terms for this. In general, it is the range between two prices for a specific trade item . A difference can arise between different buying and selling prices , stock exchange prices or debit and credit interest and is then called the margin. The interest margin, on the other hand, is not a difference and therefore not a margin, but a business key figure for measuring the profitability of a credit institution .

In trade , the difference between acquisition cost / cost and the selling price is called the trading margin . The reciprocal value of the trade margin is the cost of sales ratio , while the calculation surcharge, which is similar to a margin, represents the surcharge on the cost price. The margin is usually higher with private label than with manufacturer brands .

Credit institutions

At banks, the term margin is used in several areas. Sometimes even price, interest and schedule business-related spreads called the margin, but the synonym Spread (has this English "span" ) enforced.

In the lending business , the credit margin is gradually made up of the following margin components:

All three components ultimately result in the loan interest for the customer.

In foreign exchange , varieties - and precious metals trading , the differences between hot interbank rates and exchange rates in customer business margins. They increase the market values ​​when the customer buys and reduce them when they sell.

${\ displaystyle {\ text {Marge}} = {{\ text {Ask price}} - {\ text {Bid price}}}}$

The margin is the difference between the higher ask price and the lower bid price .

In securities trading , the margin indicates the difference between the issue price and the current market value of a security . A margin is the security deposit for futures transactions in stock exchange trading .

Bank calculation

The bank calculation knows the margin calculation as a calculation method , the starting point of which is the condition margin as the difference between the effective interest rate of a customer transaction and the effective interest rate of an alternative transaction on the financial market ( opportunity costs ). From this gross margin are to determine the net margin , the cost of risk margin and operating costs margin deducted.

height

In addition to the credit risk, the amount of the margin also depends on the type of underlying asset , its trading volume , market development , market liquidity and the bank customer's bargaining power . With regard to the bargaining power of bank customers, a rough distinction can be made between private households and corporate customers . The margin is lower for corporate customers than for private households and is lowest for large companies .

arbitrage

In arbitrage, the margin of indifference is the profit margin between the interest rate differential and the swap rate , at which arbitrage transactions are not yet or no longer worthwhile; there is no arbitrage .

Communications engineering

In communications engineering, various signal parameters are referred to as margins, e.g. B. the signal-to- noise margin for the signal-to-noise ratio.

Freight forwarding

The margin rate is in the forwarding business a varying price within a Preisunter- and upper pulse limit, which must be settled in the absence of fixed prices by the carrier.