What is "average client margin balance" in reference to a brokerage firm ?

Question

I dont understand the term "average client margin balances".

Please enlighten me. Is it the funds borrowed from the broker or the debit balance with the broker ? Or is it your money kept in your account at the brokerage !

Answer 1

Margin is borrowed money. It is often borrowed for very short periods of time. Thus average client margin would refer to the average amount borrowed for the specified period of time...ie if I borrow 1,000 for one day in September (30 days) my average margin balance would be $33.33 per day, and thus interest would be assessed on this amount.