--- title: "Margin Brokerage Account Profile: Reg T" description: "Sourced margin brokerage account profile: Regulation T 50% initial margin; FINRA 25% maintenance margin; margin call triggers; pattern day trader $25k minimum." canonical: https://www.getswoopr.com/accounts/margin-brokerage-account/ source: "Swoopr Investment: https://www.getswoopr.com" --- ## Direct Answer A margin brokerage account allows borrowing from your broker to purchase securities. Regulation T sets initial margin at 50% of purchase price; FINRA sets minimum maintenance margin at 25% (most brokers require 30-40%). Falling below maintenance triggers a margin call. Effective June 4, 2026, FINRA replaced the pattern day trader designation and its $25,000 minimum equity with intraday margin standards, which members may phase in until October 20, 2027. Margin interest on borrowing is deductible only against net investment income (IRC Section 163(d)). # Margin Brokerage Account Profile: Reg T, Maintenance and Margin Calls This profile cites SEC, FINRA, and Federal Reserve primary sources. It does not provide personalized investment or tax advice. Margin trading carries significant risk including the possibility of losses exceeding your initial investment; verify current rules with your broker and FINRA.org. ## Margin Requirements | Requirement | Rule | Level | | --- | --- | --- | | Initial margin (equities) | Federal Reserve Regulation T | 50% of purchase price | | Maintenance margin (minimum) | FINRA Rule 4210 | 25% of current market value | | House maintenance margin (typical) | Broker-set (above FINRA minimum) | 30-40% (varies by broker and security) | | Intraday margin (replaced the pattern day trader rule) | FINRA Rule 4210 | Intraday margin deficit must be determined and satisfied under the rule effective June 4, 2026 | | Minimum to open margin account | FINRA Rule 4210 | $2,000 | Reg T initial margin applies at time of purchase. Maintenance margin is an ongoing requirement. Brokers may set higher house minimums and may impose different requirements for individual securities (e.g., concentrated positions, low-priced stocks, or volatile names may require more equity). Source: Federal Reserve Regulation T (12 CFR 220); FINRA Rule 4210. ## How Margin Calls Work A margin call is issued when your account equity falls below the maintenance margin level: - **Equity formula:** Account Equity = Market Value of Securities minus Margin Loan Balance - **Trigger:** If Account Equity / Market Value falls below the maintenance percentage (commonly 30%), a margin call is issued - **Response options:** (1) Deposit additional cash or eligible securities; (2) Sell existing positions to reduce the loan - **Broker rights:** If the call is not met, the broker may liquidate positions without notice or consent to restore the required equity level **Example:** You buy $10,000 of stock with $5,000 cash + $5,000 margin loan (50% initial Reg T). If the stock falls to $7,143, your equity is $2,143 ($7,143 minus $5,000), exactly 30%. If it falls further to $6,500, equity is $1,500 (about 23%), below a typical 30% house requirement of $1,950, so you would need to add about $450 or sell enough stock to restore 30% equity. ## Tax Treatment of Margin Interest Margin interest paid on borrowed amounts is potentially deductible as investment interest expense under IRC Section 163(d), subject to a key limitation: the deduction is limited to your net investment income for the year (interest income + qualified dividends elected to be taxed as ordinary income + short-term capital gains). Unused investment interest expense carries forward to future years. Margin interest paid to purchase tax-exempt securities (municipal bonds) is NOT deductible. All other gains and income in a margin account are taxed the same as a cash brokerage account (long-term capital gains rates for assets held more than 12 months; ordinary income for short-term gains and dividends). ## Frequently Asked Questions What is a margin brokerage account? A margin brokerage account allows borrowing from your broker to purchase securities. Regulation T (Federal Reserve) requires 50% initial margin for equities. FINRA Rule 4210 requires 25% minimum maintenance margin; most brokers require 30-40%. Falling below maintenance triggers a margin call. Minimum $2,000 to open a margin account. FINRA replaced the legacy Pattern Day Trader framework with new intraday-margin requirements effective June 4, 2026; check your broker's current rules for intraday trading constraints. Margin interest is deductible against net investment income (IRC Section 163(d)). What is a margin call and how does it work? A margin call occurs when your account equity falls below the maintenance requirement (typically 30%). Equity = market value of securities minus margin loan. You must deposit cash or securities, or sell positions to restore the required equity level. The broker can liquidate positions without your consent if you do not meet the call. Source: FINRA Rule 4210; Federal Reserve Regulation T. What are the pattern day trader rules for margin accounts? FINRA replaced its legacy Pattern Day Trader framework with new intraday-margin requirements effective June 4, 2026. Under the prior framework, a margin-account customer who executed 4 or more day trades in 5 business days (exceeding 6% of total trades) was designated a pattern day trader and required to maintain $25,000 minimum equity at all times. That designation and the $25,000 requirement no longer exist as universal FINRA rules. Brokers are implementing the new intraday-margin framework through a permitted transition period ending October 20, 2027; intraday trading constraints now depend on the broker's implementation status and intraday margin monitoring. Cash accounts are subject to T+1 settlement and freeriding rules, not the legacy PDT framework. Source: FINRA Rule 4210 amendments, effective June 4, 2026. ## References - [FINRA Rule 4210: Margin Requirements](https://www.finra.org/rules-guidance/rulebooks/finra-rules/4210) - [Federal Reserve Regulation T (12 CFR Part 220)](https://www.govinfo.gov/content/pkg/CFR-2020-title12-vol3/pdf/CFR-2020-title12-vol3-part220.pdf) - [SEC Investor Bulletin: Day Trading](https://www.sec.gov/investor/alerts/daytrading.htm) **[Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/)** The Swoopr Editorial Team produces sourced investment education content for independent investors. This profile cites SEC, FINRA, and Federal Reserve primary sources verified as of September 2026. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).