Trader Definition – ‘Active Box’

Trader Definition – ‘Active Box’

Definition of ‘Active Box’

A physical location in a brokerage where securities are kept. These securities are usually held as collateral for customers’ margin positions. The collateral is used to secure broker loans, which is money lent to brokers and investors by banks. This money is used to finance the brokers’ inventory of stock and to finance the underwriting of corporate and municipal securities.

Investopedia explains ‘Active Box’

Customer margin accounts are financed with broker loans. Margin accounts enable investors to buy large quantities of securities with broker loans. The stock and bond certificates are kept in the active box until the margin account loan is paid. A bond certificate is a legal document giving the bond owner the right to collect the debt listed on the document.

Active box is also referred to as open box.

SOURCE



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