An investor opening a new margin account executes an initial transaction selling short 100… — FINRA SIE (Securities Industry Essentials)

An investor opening a new margin account executes an initial transaction selling short $100$ shares of a marginable stock at $\$28$ per share. Under Federal Reserve Regulation T and FINRA rules, what is the minimum dollar amount of initial equity the investor must deposit?

Cevap: 2000 USD

Cevap

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

To determine the required initial deposit for a short sale in a new margin account, both Regulation T and FINRA rules must be evaluated. Regulation T requires 50% of the market value (

100 \times \$28 = \$2,800 \times 50\% = \$1,400

). However, FINRA Rule 4210 sets a mandatory minimum initial equity requirement of

2,000 for establishing short positions. Because the investor must satisfy the stricter of the two rules, the required initial deposit is

2,000.

Adım Adım Çözüm

Calculate total short sale proceed value

2,800 (100 shares ×

28 per share)

Initial margin calculations are based on total transaction proceeds.

Calculate Federal Reserve Regulation T initial margin requirement

1,400 (50% of

2,800)

Regulation T mandates a standard 50% initial margin deposit on equity short sales.

Apply FINRA Rule 4210 minimum initial equity rule for short sales

$2,000 minimum requirement

FINRA rules require a strict minimum initial equity deposit of

2,000 to open a short position in a margin account, overriding Regulation T when the 50% calculation is less than

2,000.

Anahtar Kavram

FINRA Initial Margin Minimum Equity Rule for Short Sales

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