An investor with no existing positions opens a new margin account and executes a short sal… — FINRA SIE (Securities Industry Essentials)

An investor with no existing positions opens a new margin account and executes a short sale of $400$ shares of common stock at $\$8$ per share. Under Regulation T and FINRA rules, what is the minimum initial cash deposit required from the investor for this transaction?

Cevap: 2000 USD

Cevap

The minimum initial deposit required is $2,000.

The total short sale value is

400 \times \$8 = \$3,200

. While Federal Reserve Regulation T requires 50% of the purchase/sale amount (

1,600

), FINRA rules mandate a minimum initial equity deposit of

2,000 for any new margin position that exceeds

2,000 in total value but yields a Reg T calculation under

2,000. Therefore, the greater amount of

2,000 must be deposited.

Adım Adım Çözüm

Determine total transaction value

400 \text{ shares} \times \$8 = \$3,200

Establishing the total short market value is necessary to compute the percentage-based margin obligation.

Calculate Regulation T requirement

50\% \text{ of } \$3,200 = \$1,600

Regulation T mandates a 50% initial margin requirement on equity positions.

Apply FINRA initial minimum requirement rule

\$2,000

minimum deposit required

FINRA Rule 4210 mandates a minimum initial equity deposit of

2,000 for margin accounts. Since

1,600 is less than the

2,000 threshold, the

2,000 minimum applies.

Anahtar Kavram

FINRA Initial Margin Minimum Equity Requirement

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