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Zorluk: Çok zorMargin Accounts and Borrowing Requirements

A customer with no existing positions opens a new margin account and executes a short sale of 1,0001,000 shares of a marginable common stock priced at $2.00\$2.00 per share. What is the minimum initial margin deposit required from the customer to satisfy Federal Reserve Regulation T and FINRA rules?

  1. A
    1,0001,000
  2. B
    2,0002,000
  3. 2,5002,500Cevap
  4. D
    3,0003,000

Cevap

The customer is required to deposit $2,500.
Under FINRA Rule 4210, when shorting stock trading under 5.00pershare,theminimummarginrequirementisthegreaterof5.00 per share, the minimum margin requirement is the greater of 2.50 per share or 100% of current market value. For 1,000 shares at 2.00pershare,1002.00 per share, 100% of market value equals 2,000, while 2.50pershareequals2.50 per share equals 2,500. Because 2,500ishigherthanboth1002,500 is higher than both 100% of market value ( 2,000) and the 50% Regulation T requirement (1,000),theinvestormustdeposit1,000), the investor must deposit 2,500.

Adım Adım Çözüm

1
Calculate total short market value and standard 50% Regulation T requirement
Total market value = 1,000 shares×$2.00=$2,0001,000 \text{ shares} \times \$2.00 = \$2,000. Regulation T 50% requirement = 50%×$2,000=$1,00050\% \times \$2,000 = \$1,000.
Federal Reserve Regulation T establishes a baseline initial requirement of 50% of the trade value.
2
Determine standard FINRA minimum initial account equity requirement
Standard FINRA minimum initial deposit = $2,000\$2,000.
FINRA Rule 4210 mandates a minimum deposit of $2,000 to establish and trade in a margin account.
3
Evaluate FINRA rule for shorting low-priced securities (under $5.00 per share)
Requirement = Greater of $2.50\$2.50 per share (1,000×$2.50=$2,5001,000 \times \$2.50 = \$2,500) or 100% of current market value ($2,000\$2,000). The greater value is $2,500\$2,500.
To mitigate risk on low-priced volatile stocks, FINRA imposes strict minimum equity requirements on short sales.
4
Select the highest governing requirement
The governing requirement is $2,500\$2,500.
The investor must satisfy the highest requirement among Reg T ($1,000\$1,000), standard FINRA initial minimum ($2,000\$2,000), and FINRA low-priced short sale minimum ($2,500\$2,500).

Anahtar Kavram

FINRA Low-Priced Short Sale Margin Requirements
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Konular

Margin Accounts and Borrowing Requirements