A brokerage account that is used for the purpose of lending money to clients seeking to fund investment transactions (trades) on margin. By nature margin accounts allow investors a wider scope of trades (than cash accounts). Investors trading on margin can partially fund their trades, with the reminder being funded by their brokerage firms, and can also embark on short selling (of securities). This account may also be used as a performance bond for clients trading in derivatives.

Margin traders will have to pay interest on the cash amounts or the value of the securities borrowed through the margin account. At the end, these loans have to be repaid at maturity date.