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The minimum margin requirement, sometimes called the maintenance margin requirement, is the ratio of (stock equity − leveraged dollars) to stock equity, where "stock equity" is the stock price multiplied by the number of shares bought and "leveraged dollars" is the amount borrowed in the margin account.
“With a margin account, they don’t have to wait: They can access cash instantly,” says Watts. “You still have to pay interest for those three days, but it’s minuscule.” For instance, a ...
Margin accounts at brokerage firms allow investors to use their stock investments as collateral to take out a loan. In bull markets, margin loans are more prevalent since stock values are rising.
In contrast, if the market price of his contract has decreased, the exchange charges his account that holds the deposited margin. If the balance of this account becomes less than the deposit required to maintain the account, the trader must immediately pay additional margin into the account in order to maintain the account (a "margin call").
Buying on margin means investors borrow funds through their brokerage accounts to invest, with the goal being to earn more money through your investment. But sometimes, you may lose money when the ...
Special memorandum account (SMA) [1] is a margin credit account used for calculating US Regulation T requirements on brokerage accounts. In addition to Initial Margin and Maintenance Margin requirements, the SMA ledger is used to lock in unrealized gains that augment the client's buying power. According to Regulation T, Section 220.5: [2]
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