Figure 17: Initial Route

Initial margin calculation for options

For securities, the definition of margin includes three important concepts: the Margin Loan, the Margin Deposit and the Margin Requirement. The Margin Loan is the amount of money that an investor borrows from his broker to buy securities. The Margin Deposit is the amount of equity contributed by the investor toward the purchase of securities in a margin account. The Margin Requirement is the minimum amount that a customer must deposit and it is commonly expressed as a percent of the current market value. The Margin Deposit can be greater than or equal to the Margin Requirement. We can express this as an equation:

Margin Loan + Margin Deposit = Market Value of Security
Margin Deposit >= Margin Requirement

Borrowing money to purchase securities is known as "buying on margin". When an investor borrows money from his broker to buy a stock, he must open a margin account with his broker, sign a related agreement and abide by the broker's margin requirements. The loan in the account is collateralized by investor's securities and cash. If the value of the stock drops too much, the investor must deposit more cash in his account, or sell a portion of the stock.

Securities Initial and Maintenance Margin

The Federal Reserve Board and self-regulatory organizations (SROs), such as the New York Stock Exchange and FINRA, have clear rules regarding margin trading. In the United States, the Fed's Regulation T allows investors to borrow up to 50 percent of the price of the securities to be purchased on margin. The percentage of the purchase price of securities that an investor must pay for is called the initial margin. To buy securities on margin, the investor must first deposit enough cash or eligible securities with a broker to meet the initial margin requirement for that purchase.

Once an investor has started buying a stock on margin, the NYSE and FINRA require that a minimum amount of equity be maintained in the investor's margin account. These rules require investors to have at least 25 percent of the total market value of the securities they own in their margin account. This is called the maintenance margin. For market participants identified as pattern day traders, the maintenance margin requirement is a minimum of $25, 000 (or 25% of the total market value of the securities, whichever is higher).

When the balance in the margin account falls below the maintenance requirement, the broker can issue a margin call requiring the investor to deposit more cash, or the broker can liquidate the position.

Brokers also set their own minimum margin requirements called "house requirements". Some brokers extend more lenient lending conditions than others and lending terms may also vary from one client to the other but brokers must always operate within the parameters of margin requirements set by regulators.

MV001 STANDING CRUCIFIX- BLACK STANDING ST. BENEDICT CRUCIFIX, BOXED.
Single Detail Page Misc (MV001)
  • A GREAT CATHOLIC/RELIGIOUS GIFT

Futures Trading Strategy  — Inside Futures
Overpriced and over-complex futures contract trading strategies that include complex formulas and multiple lagging indexes are generally not conducive to successful futures trading.

FindingKing St. Benedict Door Medal Silver Plated Enamel Red & Blue 4"
Home (FindingKing)
  • This is a new silver plated blue and red enamel St. Benedict door medal
  • St. Benedict is the patron saint of farmers, civil engineers, students and all members of religious communities
  • On the arms of the cross are the initial letters of a rhythmic Latin prayer: Crux sacra sit mihi lux! Nunquam draco sit mihi dux! (May the holy cross be my light!...
  • Above the cross is the word pax (peace), that has been a Benedictine motto for centuries. Around the margin of the back of the medal, the letters V R S N S M V...
  • Makes a great gift for yourself or a loved one
FindingKing 25 St. Benedict Medals
Art and Craft Supply (FindingKing)
  • This is a new pack of 25 St. Benedict oxidized medals
  • St. Benedict is the patron saint of farmers, civil engineers, students and all members of religious communities
  • On the arms of the cross are the initial letters of a rhythmic Latin prayer: Crux sacra sit mihi lux! Nunquam draco sit mihi dux! (May the holy cross be my light!...
  • Above the cross is the word pax (peace), that has been a Benedictine motto for centuries. Around the margin of the back of the medal, the letters V R S N S M V...
  • Perfect for making a custom rosary or other items
Gogh Jewelry Design Key Chain with Silver EP Buddha, St. Bendictus, Made with Love and Garnet Charms
Jewelry (Gogh Jewelry Design)
  • Key Chain with Silver EP Buddha, St. Bendictus, Made with Love and Garnet Charms
  • Buddha is a very well known symbol of happiness, wealth, kindness and innocent contented joy. It is believed that by rubbing his tummy each day, which is said to...
  • Garnet: Stone of Commitment inspires love and devotion. Balances sex drive & alleviates emotional disharmony. Regenerates the body & DNA. Controls anger...
  • St Benedictus Charm: This medal originally came from a cross in honor of St Benedict. On one side, the medal has an image of St Benedict, holding the Holy Rule in...
FindingKing 3 St. Benedict Cross Silver Plated w/Black Enamel Car Visor Clips 3"
Sports (FindingKing)
  • This is a new set of 3 St. Benedict cross silver plated car visor clips 3
  • St. Benedict is the patron saint of farmers, civil engineers, students and all members of religious communities
  • On the arms of the cross are the initial letters of a rhythmic Latin prayer: Crux sacra sit mihi lux! Nunquam draco sit mihi dux! (May the holy cross be my light!...
  • Above the cross is the word pax (peace), that has been a Benedictine motto for centuries. Around the margin of the back of the medal, the letters V R S N S M V...
  • Makes a great gift for yourself or a loved one
Related Posts