It refers to an additional buffer amount added on top of the consideration (purchase cost) to account for possible price movement when placing a market order.
Breakdown:
• Consideration (₦21,200.00) = Cost of buying 40 units at ₦530 each (₦530 × 40 = ₦21,200).
• Market Margin (₦2,120.00) = A 10% buffer added to account for potential increase in price while the order is being executed.
• This is common when placing market orders, as prices can fluctuate between the time you place the order and when it’s actually fulfilled.
• If the full margin isn’t used (if the price doesn’t increase), the unused amount is typically refunded.
Why it’s important:
• It helps ensure your order is filled even if the market price shifts slightly upward.
• It’s not a charge or fee—it’s a temporary hold.
Example:
If the stock price jumps to ₦535 before your order goes through, the system can still buy the shares using part of the margin without failing the transaction.