Margin: A deposit contributed by a customer as a percentage of the current market value of the securities held in a margin account is thus the margin amount. This amount changes as the price of the investment changes. basicaly, margin is a buying a security by borrowing funds from a brokerage house.

Margin Requirement: The minimum equity required to support an investment position, the maximum percentage of the investment that can be loaned by the brokerage firm - is set by the Federal Reserve Board. To buy on margin refers to borrowing part of the purchase price of a security from a brokerage firm.

Option: A contract that gives the owner the right, but not the obligation, to buy or sell a particular asset (the underlying stock) at a fixed price (the strike price) for a specific period of time (until expiration) . The contract also obligates the writer to meet the terms of delivery if the contract right is exercised by the owner.