1.Banking: (1) Difference between the market value of a collateral and amount of the loan advanced against it. Also called haircut. (2) Percentage added to a market rate of interest, or subtracted from a market rate of deposit, to provide a return to the bank.
4.Currency trading: Difference between the spot price and forward price quoted for a currency.
5.Futures trading: Security deposit that buyers and sellers must place with the clearing house to guaranty they will perform as agreed (to make or take the delivery) on or before the futures contract's expiration date.
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