Debit Balance

In a margin account, money owed by the customer to the broker for funds advanced to purchase securities. The debit balance is the amount of funds the customer must put into his or her margin account, following the successful execution of a security purchase order, in order to properly settle the transaction.

When buying on margin, investors borrow funds from their brokerage and then combine those funds with their own to purchase a greater number of shares than they would have been able to purchase with their own funds. The debit amount recorded by the brokerage in an investor's account represents the cash cost of the transaction to the investor.


Investment dictionary. . 2012.

Look at other dictionaries:

  • debit balance — / debɪt ˌbæləns/ noun a balance in an account showing that more money is owed than has been received ● Because of large payments to suppliers, the account has a debit balance of £1,000 …   Dictionary of banking and finance

  • debit balance — The amount that is owed to a broker by a margin customer for loans the customer uses to buy securities. Bloomberg Financial Dictionary * * * debit balance debit balance ➔ balance1 * * * debit balance UK US noun [C] ► BANKING …   Financial and business terms

  • debit balance — balance of a debt, negative sum in a bank account …   English contemporary dictionary

  • debit balance — The balance of an account whose total debit entries exceed the total of the credit entries. Debit balances represent expenditure and assets …   Accounting dictionary

  • debit balance — The balance of an account whose total debit entries exceed the total of the credit entries. Debit balances represent expenditure and assets …   Big dictionary of business and management

  • debit balance — Account balance showing money owed to lender or seller. Accounting condition where there is an excess of debit over credit entries …   Black's law dictionary

  • exceptional debit balance — debit balance that is out of the ordinary …   English contemporary dictionary

  • Adjusted Debit Balance — The amount of money owed by a customer to his/her broker after paper profits and losses are taken into consideration. This value is calculated by subtracting the accountholder s profits on short sales and balances in a special miscellaneous… …   Investment dictionary

  • adjusted debit balance — ( ADB) The account balance for a margin account that is calculated by combining the balance owed to a broker with any outstanding balance in the special miscellaneous account, and any paper profits on short accounts. Bloomberg Financial… …   Financial and business terms

  • customers' net debit balance — The total amount of credit given by NYSE member firms to finance customers purchasing securities. Bloomberg Financial Dictionary …   Financial and business terms

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