Margin. What is it? First we would like to give you the definition from the dictionary of economic Margin – the term used in banking, stock exchange, insurance trade practice to designate the difference between interest rates prices of securities, prices of goods and other indicators, the difference between a hundred vkami on borrowed and loans; between interest rates on loans granted to various categories of borrowers, the sum of welfare under which credit is provided and the amount of credit issued, an additional share of the deposit, collateral or acceptable currency fluctuations. Rather complicated definition. let's see what it means and what The margin is useful. Simply put, the margin is the difference between the two qualitatively identical but kollichestvenno different indicators. But it is not all by itself it is not profit. Margin brings real benefits in commercial transactions, there is a certain amount of money that is left with an intermediary (broker) or clearinghouse for insurance against losses on open futures contracts (short: a contract in which payment occurs after a certain period after its conclusion), and the margin is not part of the payment. Margin returns posrednikoposle full implementation of the contract and will be involved as an insurance instrument only in the event of adverse conditions.
Another very important point – at stock market shares can be bought 'on margin', that is, the buyer may pay cash only part of the price and thereby take a loan broker. Contribution margin. In the classic sense of contribution margin is the difference between sales price and cost. Accordingly, the more successful we maximize the difference to profit more. This concept is more applicable to commercial or industrial enterprises. However, the resemblance of words and Mazhinalnaya Mazha income often makes the mistake, and financiers at the expense of the utility of their use. We strongly recommend that you do not focus on these aspects.