Call Money Rate

Call Money Rate

The interest rate on a type of short-term loan that banks give to brokers who in turn lend the money to investors to fund margin accounts. For both brokers and investors, this type of loan does not have a set repayment schedule and must be repaid on demand.

Trading on margin is a risky strategy in which investors make trades with borrowed money. The advantage of margin trading is that investment gains are magnified; the disadvantage is that losses are also magnified. When investors trading on margin experience a decline in equity past a certain level relative to the amount they have borrowed, the brokerage will issue a margin call that requires them to deposit more cash in their account or to sell enough securities to make up the shortfall.


Investment dictionary. . 2012.

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Look at other dictionaries:

  • Call money rate — Also called the broker loan rate , the interest rate that banks charge brokers to finance margin loans to investors. The broker charges the investor the call money rate plus a service charge. The New York Times Financial Glossary …   Financial and business terms

  • call money rate — Also called the broker loan rate , the interest rate that banks charge brokers to finance margin loans to investors. The broker charges the investor the call money rate plus a service charge. Bloomberg Financial Dictionary …   Financial and business terms

  • call loan rate — See: call money rate …   Financial and business terms

  • Call Money — Money loaned by a bank that must be repaid on demand. Unlike a term loan, which has a set maturity and payment schedule, call money does not have to follow a fixed schedule. Brokerages use call money as a short term source of funding to cover… …   Investment dictionary

  • money market — the short term trade in money, as in the sale and purchase of bonds and certificates. [1925 30] * * * Set of institutions, conventions, and practices whose aim is to facilitate the lending and borrowing of money on a short term basis. The money… …   Universalium

  • Money market in India — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • Money At Call — A short term loan that does not have a set repayment schedule, but is payable immediately and in full upon demand. Money at call loans give banks a way to earn interest while retaining liquidity. Investors might use money at call to cover a… …   Investment dictionary

  • call account — ➔ account1 * * * call account UK US noun [C] (UK ► BANKING a bank account in which you can invest money that earns a higher rate of interest than in an ordinary account, and from which you can take money when you need it, if you tell the bank a… …   Financial and business terms

  • Broker loan rate — Related: Call money rate. The New York Times Financial Glossary …   Financial and business terms

  • broker loan rate — Related: call money rate. Bloomberg Financial Dictionary …   Financial and business terms

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