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?
Here:
" 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."
Ron
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?
Here:
" 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."
Ron
