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1. Accounting.

Profit margins measure the surplus of revenues over relevant costs, often expressed as a percentage.

Profit margins are usually expressed as a percentage of revenues, for example in the Net profit margin.

Less commonly, margins can also be expressed as a margin (percentage) on relevant costs.

Gross profit measured as a percentage of costs is also sometimes known as markup, an amount added to costs to determine a selling price.

2. Banking.

Net interest margin (NIM).

3. Bank lending.

Lending margin is a percentage amount added explicitly to a market reference rate, to calculate the total rate of interest payable by a borrower.

4. Derivatives markets.

Margin is a refundable deposit payable by market participants to protect other participants in the market against the risk of a default.

In this context, margin is a form of collateral.

5. Financing.

An amount implicitly built into a total interest rate or discount rate - charged to a client - to cover risk and a level of profit for the finance provider.

6. Secured lending.

An amount deducted from the value of an asset used as collateral, to calculate the maximum amount of any loan to be secured against the asset.

Also known as a 'haircut'.

7. Project planning and management.

A safety margin is an allowance for worsening of a key input or variable in a project.


Any other difference, usually a relatively small difference compared with the amounts themselves being compared.

For example, forward margin in foreign exchange markets.

See also

External link

Margin requirements for non-centrally cleared derivatives - BCBS and IOSCO