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Zorluk: Çok zorMargin Accounts and Borrowing Requirements

An investor opens a new margin account with a broker-dealer and executes a first-time transaction selling short 600600 shares of XYZ common stock at $4.00\$4.00 per share. Under Federal Reserve Regulation T and FINRA margin rules, what is the minimum required initial margin deposit the customer must make for this trade?

  1. A
    $1,200
  2. B
    $1,500
  3. C
    $2,000
  4. $2,400Cevap

Cevap

$2,400
For short sales of stocks priced under 5.00pershare,FINRARule4210dictatesthatthedepositrequirementis5.00 per share, FINRA Rule 4210 dictates that the deposit requirement is 2.50 per share or 100% of the current market value, whichever is greater. For 600 shares at 4.00pershare,1004.00 per share, 100% of the market value is 2,400, while 2.50pershareequals2.50 per share equals 1,500. Because 2,400isgreaterthan2,400 is greater than 1,500, and also exceeds Regulation T's 50% requirement (1,200)aswellasthestandard1,200) as well as the standard 2,000 initial equity requirement, the customer must deposit $2,400.

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1
Calculate the total short sale transaction value and Regulation T requirement.
Total market value = 600 shares×$4.00=$2,400600 \text{ shares} \times \$4.00 = \$2,400. Reg T requirement (50%) = $2,400×0.50=$1,200\$2,400 \times 0.50 = \$1,200.
Federal Reserve Regulation T specifies a base initial requirement of 50% of the short sale proceeds.
2
Apply FINRA rules for shorting low-priced equity securities.
Requirement = max⁡(600×$2.50,100% of $2,400)=max⁡($1,500,$2,400)=$2,400\max(600 \times \$2.50, 100\% \text{ of } \$2,400) = \max(\$1,500, \$2,400) = \$2,400.
FINRA Rule 4210 requires that for short sales of stock priced under 5.00pershare,theinitial/maintenanceequityrequirementis5.00 per share, the initial/maintenance equity requirement is 2.50 per share or 100% of market value, whichever is greater.
3
Compare against the standard FINRA initial account equity minimum.
Required deposit = max⁡($2,000,$2,400)=$2,400\max(\$2,000, \$2,400) = \$2,400.
The specific low-priced short sale rule requirement (2,400)exceedsthegeneralFINRA2,400) exceeds the general FINRA 2,000 initial equity threshold.

Anahtar Kavram

FINRA Short Margin Requirements for Low-Priced Securities
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Konular

Margin Accounts and Borrowing Requirements