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Information > Financial Terms > This page Exhaust Price First read
MARGIN
One who carries
securities on margin has only an equity or partial interest in the securities
he is carrying. In case of
a fall in prices which threatens to wipe out the owner's equity or margin,
the exhaust price is approached.
In other words, the exhaust price is the price at which these securities
would have to be sold entirely to obliterate the margin, or the price
at which the broker would have to sell in order to protect himself from
loss. Brokers compel their
customers to furnish additional margin before the exhaust price is reached,
or to enter a STOP LOSS ORDER which may be placed several points above
the exhaust price. |