Debit balance

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Related to Debit Balances: Credit Balances

Debit balance

The amount that is owed to a broker by a margin customer for loans the customer uses to buy securities.

Debit Balance

The amount of money an investor owes on a margin loan. This is calculated as the amount the investor directly owes his/her broker. It does not account the paper profit the investor has made on various transactions. When determining the amount owed in the case of margin call, one generally uses the adjusted debit balance, which starts with the debit balance and subtracts the amount of applicable paper profit.

debit balance

The amount owed in a brokerage margin account. A debit balance occurs when an investor purchases securities on margin or borrows money from the account by using securities as collateral. Brokerage firms typically charge an interest rate on the borrowed funds that varies with the size of the debit balance. Compare credit balance. See also call loan.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Debit balance.

A debit balance is what you owe. It's entered as accounts receivable on the books of the lender and appears on your account statement as a liability.

For example, if you have a margin account and borrow money to buy stock, your monthly brokerage statement will show a debit balance for the amount of the margin loan.

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References in periodicals archive ?

Any customer who applies for and receives a formal overdraft while the offer is running will also pay no interest on agreed debit balances from when their overdraft is set up until April 4.

Bank set to put interest charges on hold

This means that the total of all the debit balances (assets) must equal the total of all the credit balances (liabilities).

Reading a balance sheet

Perhaps its best point is that savers can offset deposits in Openplan against debit balances on other Barclays accounts,cutting the interest they pay.

MONEY: Questions OF CASH

The clearinghouse pays interest on net credit balances and charges interest to net debit balances. It pays a fixed number of basis points less than the bond interest rate.

A bank can have a net credit or a net debit balance. Favorable clearings increase a net credit or decrease a net debit balance.

A bank can buy bonds to offset a net credit balance and sell bonds to offset a net debit balance. Monitoring and transactions costs make it unlikely that a bank would continually offset random fluctuations caused by its depositors' payments.

A model of the BFH payments system

Then, all of the accounts are listed in the order in which they appear in the ledger with one column for the debit balances and one column for the credit balances.

(Debit balances should be in the debit column and credit balances should be in the credit column.) PRACTICE WHAT YOU HAVE LEARNED Practice what you have learned about preparing a trial balance by completing Problem 3-6 at the end of the chapter.