What does MGN mean in BANKING

MGN stands for margin.

When you borrow funds to invest, the lender requires you to have a certain amount of money on hand as collateral in case your investment doesn't go well and you're unable to recover your loss. This money is known as margin. It acts like insurance so the lender won't be at risk of losing all their money in the event that your investment doesn't pay out.

Equity is the value of what you own in an account or asset after all debts are settled. In contrast, margin is the amount of money that you borrow from a broker or lender when trading securities or other assets. So margin is borrowed funds, while equity represents owned funds or assets.

Using margin can provide investors with several benefits such as increased buying power, leverage on investments, ability to diversify portfolios more effectively, and enhanced liquidity when it comes to trading securities. Using leverage also allows investors to increase potential profits if their trades pan out favorably but also involves greater risk if their trades go wrong since any losses cannot be recovered through additional capital injections as with stock purchases using cash only accounts

If an investor's position moves against them while they are trading with borrowed funds (margin), their broker may issue a “margin call” which essentially gives them notice that additional capital must be put up in order to maintain their position size/avoid liquidation due to insufficient collateral/margin requirement being met by current market price level/lack of available funds.