Legal Definitions - remargining

Definition: Remargining is a term used in the securities industry to describe the process of depositing additional cash or collateral with a broker when the equity in a margin account falls to an insufficient level.

For example, let's say an investor has a margin account with a broker and has purchased $10,000 worth of stock. The investor has put up $5,000 of their own money and borrowed the remaining $5,000 from the broker. If the value of the stock falls and the equity in the account drops below a certain level, the broker may require the investor to deposit additional funds or securities to bring the account back up to the required level. This process is known as remargining.

Another example could be an investor who has a margin account with a broker and has purchased $20,000 worth of stock. The investor has put up $10,000 of their own money and borrowed the remaining $10,000 from the broker. If the value of the stock falls and the equity in the account drops below a certain level, the broker may require the investor to deposit additional funds or securities to bring the account back up to the required level. This process is also known as remargining.

These examples illustrate how remargining works in the securities industry. It is important for investors to understand the risks involved in trading on margin and to be prepared to deposit additional funds or securities if necessary to avoid a margin call.