Chapter 18 preview
Chapter 18: Margin
Chapter 18 covers margin: how accounts work, what Regulation T requires, and how to calculate equity, maintenance margin calls, and buying power. Reg T requires 50% initial margin on equity purchases. Minimum maintenance is 25% for long positions, 30% for short. When equity falls below maintenance, a margin call is issued. The SMA records excess equity above Reg T, representing buying power. Pattern day traders must maintain $25,000 equity.
Chapter summary
Chapter 18 covers margin: how accounts work, what Regulation T requires, and how to calculate equity, maintenance margin calls, and buying power. Reg T requires 50% initial margin on equity purchases. Minimum maintenance is 25% for long positions, 30% for short. When equity falls below maintenance, a margin call is issued. The SMA records excess equity above Reg T, representing buying power. Pattern day traders must maintain $25,000 equity.
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Key concepts
- Margin
- Regulation T
- Opening a Margin Account
- Basics of Long Margin Positions
- Basics of Short Margin Positions
- Combined Long and Short Positions
- Margin Requirements for Other Securities
- Other Margin Customers
- Regulation T
- Opening a Margin Account
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