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Margin

The term margin has many meanings:

• In telecommunication, margin has the following meanings:
  • In communications systems, the maximum degree of signal distortion that can be tolerated without affecting the restitution, i.e., without its being interpreted incorrectly by the decision circuit.
  • The allowable error rate, deviation from normal, or degradation of the performance of, a system or device.

Source: Federal Standard 1037C

• In publishing, the margin refers to the white space around text or illustrations in printed or displayed documents such as books.

• In finance, margin refers to
  • The difference between the market value of a stock and the loan a stockowner received from a broker in connection with its purchase.
  • The account, including both stock and loan, is known as a margin account and the loan is collateralized by the stock; if the value of the stock drops, the owner will be asked to put in more cash or to sell some of the stock. That request is a margin call.

• In futures contracts, margin refers to the cash collateral deposited by a party to contract, with a trader or exchange, to ensure against default.

• In manufacturing, gross margin is the difference between the energy, material and labor costs required to construct an object and the wholesale price obtained for it. This is not the same as profit, which must account for other costs such as depreciation, advertising, rental, engineering, etc.. These and other expenses are paid for from gross margin, debt, or from start-up capitalization. Similar considerations apply to wholesale distribution or retail sales, and various service industries such as the exhibition of movies or the provision of gardening services.

• In machine learning, margin refers to the minimal distance of a sample to the hyperplane dividing positive and negative examples. Some machine learning methods, such as SVM or Boosting, work by searching for a hyperplane that maximizes the margin.

See also: profit margin