Maintenance requirement
The minimum equity, as a percentage of the account's value, that you must keep in a margin account or pledged account.
Required equity = Maintenance % × Market value ; Excess = (Market value − Loan) − Required equity
Explanation
Two percentages govern borrowing against stocks:
- Initial margin (Regulation T): you must put up at least 50% of the purchase price of marginable stocks. This limits how much you can borrow at the start.
- Maintenance requirement: after that, your equity (market value minus loan) must stay above a minimum share of the market value. FINRA Rule 4210 sets a floor of 25% for long stock positions.
Brokers set their own “house” requirements above the floor. 30% to 40% is common for diversified holdings. Concentrated positions, volatile or low-priced stocks, leveraged ETFs and options can require 50% to 100% (fully paid). Brokers can raise requirements without advance notice, often during turbulent markets, which is exactly when you are most exposed.
SBLOC lenders express the same idea differently, as a maximum LTV. A lender that calls when LTV exceeds 70% is effectively using a 30% maintenance requirement.
Because the requirement varies by broker, holding and market conditions, treat any single number as an assumption. In scenarios, you set the maintenance percentage (30% is a sensible default), and the app uses it to calculate your cushion and detect calls. Try a higher value to stress-test.
Example
You hold $1,000,000 of stock with a $500,000 margin loan. Your broker’s requirement is 30%.
- Equity: $1,000,000 − $500,000 = $500,000 (50%)
- Required equity: 30% × $1,000,000 = $300,000
- Excess equity: $500,000 − $300,000 = $200,000
The account falls to $700,000:
- Equity: $700,000 − $500,000 = $200,000 (28.6%)
- Required: 30% × $700,000 = $210,000
- Shortfall: $10,000, a margin call
Under FINRA’s 25% minimum, the requirement at $700,000 would be $175,000, so the same account would still have $25,000 of excess.