Margin
Series 7 SMA
A direct guide to SMA on the Series 7: what the Special Memorandum Account is, when buying power is twice SMA, how selling power differs, and how SMV fits short margin questions.
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Direct answer
Series 7 SMA
A direct guide to SMA on the Series 7: what the Special Memorandum Account is, when buying power is twice SMA, how selling power differs, and how SMV fits short margin questions.
- Start with the free diagnostic to find weak topics.
- Use the related study pages below to repair the missed rule.
- Then prove the rule in mapped practice questions and a timed exam simulation.
Study sequence
Use the page, then prove it in reps.
Read the strategy, run a short diagnostic, repair the missed rule, then move into mapped practice.
On this page
Direct answer: what SMA means
SMA means Special Memorandum Account. It is a margin-account bookkeeping entry that captures excess equity above the Regulation T requirement. It can support withdrawals or additional purchases, but it is not cash sitting separately in the account.
Is buying power always twice SMA?
For a standard long margin purchase under 50% Regulation T, buying power is SMA times 2 because each dollar of SMA supports two dollars of marginable stock. That does not mean every possible use of SMA is simply doubled. Withdrawals, short sales, house requirements, concentrated positions, low-priced securities, and non-marginable securities can change what the customer can actually do.
The long margin setup
Equity
Long market value minus debit balance equals equity.
Reg T requirement
50% of long market value for a standard margin purchase.
Reg T excess
Equity minus 50% of long market value. Positive excess can feed SMA.
Buying power
SMA times 2 for standard marginable long purchases under 50% Reg T.
The short margin setup and SMV equation
SMV means short market value. In a short margin account, equity equals credit balance minus short market value. The credit balance includes the short-sale proceeds plus the customer's required deposit. When the short stock falls, SMV falls and equity rises. When the short stock rises, SMV rises and equity falls.
The exam trap
Do not start a margin question by hunting for SMA. Start by naming the account type: long or short. Then write the balance sheet, compute equity, compare it with the relevant requirement, and only then answer SMA, buying power, excess, or call amount.
Candidate questions
Frequently asked
What is SMA on the Series 7?
SMA is the Special Memorandum Account, a record of excess equity in a margin account that can support withdrawals or new transactions.
Is SMA the same as buying power?
No. SMA is the account entry. Buying power is what that SMA can support. Under standard 50% Reg T for long marginable purchases, buying power is usually twice SMA.
What is the SMV margin account equation?
For a short account, equity equals credit balance minus short market value: CR - SMV = equity.
Does SMA go down when the market drops?
No. SMA does not decrease from market movement alone. It decreases when the customer uses it.
Next study steps
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Turn the article into reps
Practice margin from the balance sheet
Use the SMA guide as the concept pass, then drill long and short account formulas until the account setup is automatic.
PassSeries7 is an independent study product and is not affiliated with FINRA or any official exam body. The 2026 FINRA Series 7 outline is published at finra.org/series7.
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