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The collateral deposit or performance bond deposited with a broker at the time a derivative position or an underlying security position is taken. Initial margin may be set by government regulators (the Federal Reserve Board on securities in the United States) or by the exchange where the instrument is traded (futures contracts). If the broker carrying the position and handling the trade feels the minimum margin does not give her firm and its customers adequate protection, she may set a higher minimum margin. See also Margin.
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