Close Navigation

Margin of Safety

Trading Term

The margin of safety is a fundamental concept in value investing, referring to the buffer or cushion between an asset’s intrinsic value and its market price. It represents the degree to which an investor can tolerate errors in judgment, poor market conditions, or unexpected company performance while still expecting a satisfactory return. The concept was popularized by Benjamin Graham, mentor to Warren Buffett, as a means of protecting capital by only investing when the price is significantly below estimated value.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.