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Zorluk: OrtaMargin Accounts and Borrowing Requirements

A customer opens a new margin account with a FINRA member broker-dealer and executes a first-time transaction purchasing $80$ shares of ABC stock at $\$30$ per share. Assuming there are no existing positions or cash in the account, what is the minimum required initial cash deposit under Federal Reserve Regulation T and FINRA rules?

Cevap: 2000 $

Cevap

The minimum required initial cash deposit is $2,000.

For an initial long transaction in a new margin account, Regulation T specifies a 50% margin deposit (

1,200), while FINRA Rule 4210 enforces a minimum initial equity deposit of

2,000. Because broker-dealers must enforce the stricter rule, the investor must deposit $2,000 in cash.

Adım Adım Çözüm

1

Calculate total trade value.

80 shares ×

30 =

2,400

Initial margin requirements are computed from total transaction market value.

2

Calculate the Federal Reserve Regulation T requirement.

50% of

2,400 =

1,200

Regulation T mandates a 50% initial margin for equity purchases.

3

Determine FINRA initial minimum equity requirement.

$2,000

FINRA Rule 4210 requires a minimum initial equity deposit of

2,000 (or 100% of purchase price if total trade value is less than

2,000).

4

Compare Regulation T and FINRA minimum requirements.

Greater of

1,200 and

2,000 is $2,000

The investor must deposit whichever amount is higher between Regulation T and FINRA minimum rules.

Anahtar Kavram

Initial margin requirements under Regulation T and FINRA minimum equity rules for margin accounts

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Konular

Margin Accounts and Borrowing Requirements