Maintenance Margin vs Initial Margin (Reg T)
The minimum equity percentage you must keep in a margin account. The equity you must put up to open a margin position - generally 50%.
What is the difference between Maintenance Margin and Initial Margin (Reg T)?
Initial margin is what you need to get in (50%); maintenance margin is what you need to stay in (~25-30%).
| Maintenance Margin | Initial Margin (Reg T) | |
|---|---|---|
| In one line | The minimum equity percentage you must keep in a margin account. | The equity you must put up to open a margin position - generally 50%. |
| Example | $20,000 position with $10,000 borrowed. If the value falls to $13,000, equity is $3,000 - about 23% - and you are below a 25% requirement. | To buy $20,000 of stock on margin you must deposit $10,000 of your own equity. |
| Unit | Positions & Trade Mechanics | Positions & Trade Mechanics |
| Series 65 | Section 3: Client Strategies | Section 3: Client Strategies |
What is Maintenance Margin?
The ongoing floor on account equity after a position is open. FINRA sets the industry minimum at 25% of market value; most brokers require 30-40%. Fall below it and the broker issues a margin call.
What is Initial Margin (Reg T)?
Regulation T, set by the Federal Reserve, requires an investor to deposit at least 50% of the purchase price of a marginable security when opening a position. Brokers may impose stricter house requirements.