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DEFINITION of 'Margin Account'. A brokerage account in which the broker lends the customer cash to purchase securities.The loan in the account is collateralized by the securities and cash.If the value of the stock drops sufficiently, the account holder will be required to deposit more cash or sell a portion of the stock.n a margin account, you are investing with your broker's money. By using leverage in such a way, you magnify both gains and losses.
What is a 'Margin'. Margin is the difference between a product or service's selling price and its cost of production or to the ratio between a company's revenues and expenses. It also refers to the amount of equity contributed by an investor as a percentage of the current market value of securities held in a margin account.