Margin call
The broker demanding cash or selling your holdings because your borrowing got too large.
Where it is explained in full
Cash secured puts and the wheel. Selling a put with cash set aside is a paid promise to buy stock at a price you chose. The wheel chains that promise to a covered call. Both deserve a full accounting.
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Words beside it
- call
An option contract that gives someone the right to buy your shares at a set price, which you sell to collect cash.
- Call option
The right, not the obligation, to buy 100 shares at a set price by a set date.
- Contribution margin
Price minus variable cost per unit. What each sale contributes toward fixed costs and profit.
- Gross margin
Revenue minus the direct cost of what was sold, as a percent of revenue.
- Margin
Borrowing from a broker to hold a position, or the collateral required for it.
- Marginal tax rate
The rate on your last dollar of income. The rate that matters for most decisions.
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