The term margin, in the world of stock trading, refers to the amount of money that can be used in a transaction wherein the buyer borrows money from a broker in order to purchase stock. Trading by using a margin, which requires the use of a margin account, lets buyers purchase more stock than usual, but it also operates at a higher risk and with higher, more stringent requirements than a typical trading account.
A margin account is set up separately from the trader's typical cash account. The two accounts may be connected, or they may be entirely separate, but there must be two accounts, with one specifically used for margin trading. The margin account requires a minimum deposit, which will vary depending on the broker you use, and this amount is known as the minimum margin.
A person who is trading with the margin method may borrow up to 50% of the price of a stock from the broker in order to purchase. The 50% is known as the initial margin. Some brokers may require that you borrow more than 50% depending on their regulations as well as your history with them, but you may borrow less if you wish.
If the amount of money you borrow on margin exceeds the amount permitted, either because you withdraw funds from your account or because your existing stock holdings decline in value, then the broker may put out margin calls. This essentially means you must fund the account to a sufficient level so the amount of margin does not exceed what is permitted. If you do not respond in a timely manner when you receive a margin call, the stocks that you own may be sold to satisfy the money you owe. This can sometimes result in significant financial loss.