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Zorluk: OrtaMargin Accounts and Borrowing Requirements

An investor opens a new margin account with a FINRA member broker-dealer and executes an initial transaction by selling short 100 shares of a marginable equity security at $18 per share. What is the required initial margin deposit for this transaction?

  1. A
    $900
  2. B
    $1,800
  3. $2,000Cevap
  4. D
    $2,700

Cevap

The investor must deposit $2,000.
Under FINRA Rule 4210, the minimum initial equity requirement to open a short position in a margin account is 2,000.AlthoughFederalReserveRegulationTrequires502,000. Although Federal Reserve Regulation T requires 50% of the market value ( 900), FINRA rules require the investor to deposit the greater of Regulation T or $2,000 for short sales.

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1
Calculate the total short sale market value
1,800(100shares×1,800 (100 shares × 18 per share)
Establishing total trade value is required to calculate margin requirements.
2
Calculate the Regulation T requirement
900(900 ( 1,800 × 50%)
Federal Reserve Board Regulation T requires a 50% deposit of the total transaction value.
3
Apply FINRA minimum initial equity rule for short sales
$2,000 minimum deposit
FINRA rules mandate a minimum initial equity deposit of 2,000forshortpositions.Unlikelongmarginpurchases,shortsalesdonotallowadepositoflessthan2,000 for short positions. Unlike long margin purchases, short sales do not allow a deposit of less than 2,000 for small transactions.

Anahtar Kavram

FINRA Initial Margin Minimum Requirement for Short Sales
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Konular

Margin Accounts and Borrowing Requirements