Maintenance margin

Maintenance margin is the minimum amount of equity that must remain in a margin account on an ongoing basis. While Regulation T sets the initial deposit required to open a position (generally 50%), maintenance margin governs the account afterward, as market prices move. Under FINRA rules, the minimum maintenance requirement is 25% of market value for long positions and 30% for short positions.

Here's how it works in practice. Suppose an investor buys $10,000 of stock in a margin account, depositing $5,000 and borrowing $5,000 from the broker-dealer. If the stock falls to $6,000, the account's equity is $6,000 − $5,000 = $1,000, which is only 16.7% of market value — below the 25% minimum. The firm issues a maintenance call, requiring the investor to deposit additional funds or securities. If the investor doesn't meet the call, the firm can sell positions in the account to bring the equity back up.

Maintenance margin exists to protect broker-dealers from losses on the money they lend. Many firms impose stricter "house" requirements above the FINRA minimums, especially on volatile or concentrated positions. Short positions carry a higher minimum (30%) because a short seller's potential loss is unlimited as a stock rises.

Margin math is heavily tested on securities exams. The SIE tests the basic minimums and vocabulary, while the Series 7 and Series 9 go deeper — expect to calculate equity, identify when an account is restricted or subject to a maintenance call, and work through how much a stock can fall before a call is triggered.