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Maintenance Margin

Maintenance margin is the minimum equity a trader must maintain in a margin account to keep a leveraged position open. FINRA Rule 4210 sets the regulatory floor at 25% of market value for long positions and 30% for short positions, though brokers routinely impose higher house requirements. Falling below this threshold triggers a margin call, and brokers may liquidate positions immediately without notice if the deficiency is not resolved.

HOW IT WORKS

Account equity equals the market value of holdings minus the outstanding margin loan. The equity ratio is calculated as (Market Value − Margin Loan) / Market Value. When this ratio drops below the broker's maintenance requirement, the account is deficient. The price at which a margin call triggers on a long position is:

Margin Call Price = Purchase Price × (1 − Initial Margin) / (1 − Maintenance Margin)

With 50% initial margin and a 30% house maintenance requirement, the call triggers at roughly 71.4% of the purchase price — a 28.6% decline. When a call is issued, the trader must deposit cash, deposit marginable securities, or reduce positions. The required sale to cure a deficiency equals the call amount divided by the maintenance rate. For short positions, the calculation inverts: rising prices erode equity, and hard-to-borrow names can carry maintenance requirements of 100% or more.

IN TAPEBOARD

Tapeboard displays your real-time equity ratio and maintenance requirement on every open leveraged position, so you can see exactly how far price can move before a call is triggered. The margin call price is calculated automatically using your broker's house requirement, not just the FINRA minimum. Traders can stress-test positions against adverse price moves using the paper trading simulator before committing real capital, and set alerts that fire when a position approaches its maintenance threshold.

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