Regulations dictate the amount of cash or equity that must be deposited and maintained as collateral against your margin loan. The amount you can borrow on margin toward the purchase of securities or for personal use is typically limited to 50% of the value of marginable securities in your account. However, the market price of the security must generally be above $3.00 per share and may not be a pink sheet or bulletin board stock.
Your buying power and cash available may fluctuate with the value of your securities from day to day. Margin is available, subject to approval, on most brokerage accounts with the exception of IRAs and Custodial accounts.
BORROWING ON MARGIN INVOLVES RISK
Minimum Equity Requirements to Use Margin
Minimum Equity Requirements to Trade Certain Option Strategies
Marginable Option Transactions
Option Expirations Policy
Day Trade Buying Power Calculation
Margin Account Maintenance and Initial Requirements
Short Stock Transactions
Leveraged Long ETF Transactions
Leveraged Short ETF Transactions
Concentrated positions on margin will hold the following requirements:
- Required Market Price for Stocks:Most stocks traded on major U.S. exchanges and Nasdaq-listed securities priced $3.00 and above are eligible for margin borrowing. Please note that some stocks including Pink Sheets or Bulletin Board Stocks are not eligible for margin borrowing.
- Minimum Market Price for Stocks: Stocks priced under $3.00 are not eligible for credit towards margin requirements and are not credited to margin buying power.
- Mutual Funds: Most mutual funds can be used as collateral, provided they've been held for at least 30 days Please note you cannot purchase mutual funds on margin.
- Bonds: Most corporate, treasury, municipal, and government agency bonds are eligible for margin borrowing. Margin ability and margin requirements are subject without advance written notice to change based on liquidity, bond ratings, concentrations, and other risk factors.
- Money market funds, certificates of deposit (CDs), annuities, and options are not available as collateral for margin borrowing.
- Maintenance Calls: Maintenance calls are due in four (4) business days under normal conditions. Exchange calls are due in one business day.
- House Required Minimums: If equity drops below house required minimum, or a call is issued for any other reason, you may be required to immediately sell securities or deposit additional funds promptly.
- Concentrated Accounts: Margin maintenance is higher for concentrated accounts and requirements may vary per security.
- Margin Maintenance: Margin maintenance ranges from 30% - 100% depending on the particular securities in an account.
- Increased Maintenance Requirements: From time-to-time, we may be required by our clearing firm to increase maintenance requirements due to overall firm concentration, or unusual market conditions. We further reserve the right to increase the requirements at our sole discretion.
European Style Option Spreads
Covered LEAPS Requirements
Initial Requirement: Proceeds from the sell of the LEAPS calls cannot be used to satisfy Reg-T requirements. If an account purchases stock and sells short covered LEAPS calls, the account will be required to meet the 50% initial requirement on the long stock.
Maintenance Requirement: The short market value of the LEAPS will be deducted from the equity when figuring maintenance requirements for accounts holding these positions. The value of the long stock will be valued at the price of the stock or the strike price of the option, whichever is greater.