RegT maintenance rate

Discussion in 'Trading' started by ronaldvanbell, Jan 13, 2010.

  1. Hi,
    it is stated that the RegT maintenance rate is 25%.
    Yet, at the end of the day, the real margin requirement rate (RegT) is 50%, and not 25%.

    why is that?

    " As governed by the Federal Reserve's Regulation T, when a trader buys on margin, key levels must be maintained throughout the life of the trade. First off, a broker cannot extend any credit to accounts with less than $2,000 in cash (or securities). Second, the initial margin of 50% is required for a trade to be entered. Finally, the maintenance margin says that an equity level of at least 25% must be maintained. The investor will be hit with a margin call if the value of securities falls below the maintenance margin."
  2. he let me "night mainetanace" of 50%, not 25%, saying that's the way Reg T goes
  3. vjay


    It is as it reads.-Initial margin(on new positions) is 50%
    - Maintenance margin of 25% equity must be
    maintained on your existing positions

    When you buy the stock,you put in 50% equity. If for some reason your stock falls in value where now your equity is less than 25%,you will get a margin call