Regulation T Margin Requirements: How Much You Can Actually Borrow

Published August 1, 2026 · Updated August 1, 2026

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Key Takeaways

Margin trading lets you buy more securities than your cash alone would cover by borrowing the difference from your broker, but two separate sets of rules govern how much you can borrow and how much equity you must keep in the account afterward — and conflating the two is the single most common source of confusion for traders new to margin. This guide separates the two clearly, walks through exactly how a margin call is triggered and resolved, and works a full numeric example from purchase through price decline through the cash or liquidation needed to meet the call.

Direct answer: Regulation T, a Federal Reserve Board rule, sets the initial margin requirement at 50% for most equity purchases — buying $10,000 of marginable stock requires at least $5,000 of your own capital, with your broker lending the rest. That's a one-time requirement at the time of purchase. A separate, ongoing requirement called maintenance margin — set by FINRA at a 25% regulatory minimum, with most brokers requiring more — governs how much equity you must keep in the account afterward. If your equity falls below the maintenance requirement, you get a margin call and must deposit funds or sell securities to restore it.

Regulation T's initial margin requirement for equities has been fixed at 50% by the Federal Reserve Board since 1974.
Initial margin applies once, at the moment of purchase; maintenance margin applies continuously for as long as you hold the position.
FINRA Rule 4210 sets a 25% maintenance margin floor, but most brokerage firms set their own higher "house" requirements, commonly 30% to 40%.
A margin call happens when account equity drops below the maintenance requirement, usually from a price decline in the margined securities.
Brokers can liquidate positions to meet a margin call without prior notice and without letting you choose which holdings are sold.
This is educational content only, not personalized investment or trading advice; margin trading carries the risk of losses exceeding your initial deposit.

What Regulation T Actually Requires

Regulation T is a rule of the Federal Reserve Board, first adopted in 1934 under the authority granted by the Securities Exchange Act and last set at its current level in 1974. It governs the extension of credit by broker-dealers to their customers for the purchase of securities, and its best-known provision is the initial margin requirement: for most equity securities, a broker may lend a customer up to 50% of the purchase price, meaning the customer must supply the other 50% from cash or existing marginable securities already in the account.

In practical terms, if you want to buy $10,000 worth of a stock that trades on margin, Regulation T requires you to have at least $5,000 of your own equity in the account, whether that's cash you deposit or the value of other securities you're willing to pledge as collateral. Your broker can then lend you the remaining $5,000, and that $5,000 loan is the "debit balance" on which the broker charges margin interest. Buy the same $10,000 of stock with cash only, and there's no Reg T requirement at all — Regulation T governs borrowed purchases specifically, not cash transactions.

Regulation T applies at the moment of purchase. It sets how much you must put up to open or add to a margin position — it does not set requirements for what happens to your equity afterward as prices move. That distinction is the one most often missed, and it's the reason margin calls exist even though the trader met the Reg T requirement in full on day one.

Not every security is marginable, and Reg T requirements can be higher than 50% for categories the Federal Reserve or an exchange considers riskier — certain low-priced, newly issued, or thinly traded names can carry higher initial requirements or be excluded from margin eligibility entirely. Confirm a specific security's marginability with your broker before assuming the standard 50% figure applies.

Initial Margin vs. Maintenance Margin

These are two different rules, set by two different regulators, governing two different moments in the life of a margin position, and treating them as interchangeable is where most margin confusion starts.

Initial margin (Regulation T)

Initial margin is a one-time gate, checked at the moment you place a margin purchase: do you have enough equity, right now, to open this position under the Federal Reserve's 50% rule? Once the trade executes, Regulation T's job for that purchase is done — it doesn't reappear to check the position again next week if the price moves.

Maintenance margin (FINRA Rule 4210 and broker house requirements)

Maintenance margin is the ongoing rule. FINRA Rule 4210 requires a margin account maintain equity equal to at least 25% of the current market value of the margined securities, at all times, for as long as the position is held. That 25% is a regulatory floor, not a ceiling: brokerage firms routinely set their own higher "house" requirements, commonly 30% to 40% for standard long equity positions, and higher still for volatile, low-priced, or concentrated positions. Your actual requirement is whatever your broker's house rules say, which may be well above the 25% FINRA minimum.

The practical difference is timing. Initial margin is checked once, when you buy. Maintenance margin is checked continuously, for as long as you hold the position — so a stock purchased comfortably within the 50% initial requirement can still trigger a maintenance-margin call weeks later purely because its price fell, even though the original purchase never violated Reg T.

Dimension	Initial margin (Regulation T)	Maintenance margin (FINRA / broker)
Set by	Federal Reserve Board	FINRA Rule 4210 (floor); individual brokers (house requirement, often higher)
When it applies	Once, at the time of purchase	Continuously, for as long as the position is held
Standard requirement	50% of purchase price for most equities	25% FINRA minimum; commonly 30%–40% at most brokers
What triggers a problem	Trying to buy more than the 50%-loan limit allows	Account equity falling below the maintenance percentage as prices move
Consequence of falling short	The order is rejected or reduced at the time of purchase	A margin call requiring a deposit or forced liquidation

How a Margin Call Works

A margin call is triggered when the equity in a margin account — the market value of securities held minus the amount owed to the broker — falls below the maintenance margin requirement on those securities. This most commonly happens when the price of a security purchased on margin declines, since a falling price shrinks equity while the debit balance (the loan amount) stays the same.

Once a margin call is issued, the trader has two ways to resolve it: deposit additional cash or marginable securities to bring equity back above the maintenance threshold, or sell enough of the position so that the smaller remaining position, against the reduced loan balance, again satisfies the requirement.

A critical detail that catches many traders off guard: margin agreements generally give the broker the right to sell securities in the account to satisfy a margin call without prior notice, and without the customer's input on which holdings are sold. Some brokers offer a grace period of a few business days in practice, but this is a courtesy at the broker's discretion, not a right under Regulation T or FINRA rules. A forced sale can also trigger taxable capital gains the trader didn't plan for.

Margin interest continues to accrue on the outstanding debit balance throughout this process — a margin call is about restoring the required equity cushion, not paying down the loan on any fixed schedule.

Worked Example: Purchase, Price Decline, and Margin Call

Illustrative numbers — for education only, not a recommendation to trade on margin.

Assume a trader wants to buy 200 shares of a stock trading at $100 per share, for a total purchase of $20,000, using a standard margin account with a 50% Regulation T initial margin requirement and a broker house maintenance requirement of 30% (above the 25% FINRA floor, which is common).

Step 1 — the initial purchase. Under Regulation T's 50% initial margin requirement, the trader must supply at least $10,000 of their own equity and can borrow the remaining $10,000 from the broker. The trader deposits exactly $10,000 in cash, buys the $20,000 of stock, and the account now shows: market value $20,000, debit balance (loan) $10,000, equity $10,000. Equity as a percentage of market value is 50% at this moment — comfortably above both the 50% initial requirement (just met) and the 30% house maintenance requirement.

Step 2 — the price declines. Over the following weeks, the stock drops from $100 to $65 per share, a 35% decline. The 200 shares are now worth 200 × $65 = $13,000. The debit balance is unchanged at $10,000, since the trader hasn't borrowed or repaid anything. Equity is now $13,000 − $10,000 = $3,000. Equity as a percentage of the new, lower market value is $3,000 ÷ $13,000 ≈ 23.1%.

Step 3 — the margin call is triggered. Because 23.1% equity is below the broker's 30% house maintenance requirement (and also below the 25% FINRA floor), the account is now under a margin call. The broker will require the trader to restore equity to at least 30% of the current $13,000 market value, which is $3,900. The trader currently has $3,000 in equity, so the shortfall is $3,900 − $3,000 = $900... but that $900 figure only covers depositing cash directly, which is the simpler of the two ways to satisfy the call.

Option A — deposit cash. Depositing $900 in new cash increases equity to $3,000 + $900 = $3,900 without changing the market value of the position ($13,000, since no shares are sold), and $3,900 ÷ $13,000 = 30.0%, exactly meeting the house requirement. This is the most direct way to meet a margin call when the trader wants to keep the full position.

Option B — sell shares. Alternatively, the trader can sell enough shares to bring the remaining position back into compliance. Selling proceeds are applied first to pay down the debit balance, so equity itself stays at $3,000 regardless of how many shares are sold — what changes is the market value the 30% requirement is measured against. Solving for the remaining position size that puts $3,000 of equity at 30% of market value works out to roughly 154 shares remaining, meaning the trader must sell about 47 of the original 200 shares to satisfy the call without adding any new cash.

The takeaway from the math. A 35% decline in the stock price turned a comfortable 50% equity cushion at purchase into a margin call requiring either a $900 cash deposit or the sale of roughly 47 of the original 200 shares — a forced reduction of about 23% of the position — purely to restore the broker's maintenance requirement, with no change yet to the trader's underlying view on the stock. The percentage drop needed to trigger a call here (roughly 23%, before house-requirement buffers) is meaningfully smaller than the drop a trader might tolerate on an unleveraged cash position, precisely because the loan balance doesn't shrink along with the stock price.

Misconceptions Versus Reality

Misconception	Reality
Meeting the 50% Regulation T requirement at purchase means the position is safe from a margin call	Regulation T's 50% is checked only at purchase; maintenance margin (25% FINRA floor, often 30%–40% at brokers) is checked continuously, and a price decline can trigger a call even though the original purchase fully complied with Reg T
The maintenance margin requirement is always 25%	25% is only FINRA's regulatory minimum; most brokerage firms set their own higher house requirements, commonly 30%–40% for standard long positions and more for volatile or low-priced stocks
A broker must notify you and give you time to respond before selling to meet a margin call	Standard margin agreements typically let the broker liquidate positions without prior notice and without letting the customer choose which holdings are sold; any grace period offered is a courtesy, not a guaranteed right
A margin call is a fixed bill you pay off like a loan installment	A margin call is a requirement to restore account equity to the maintenance percentage; it can be met by depositing cash or securities, or by selling part of the position, and the underlying margin loan continues separately
Selling shares during a margin call doesn't change your equity, so it doesn't help	Selling doesn't create new equity, but it does reduce the market value the maintenance percentage is measured against, which is exactly how it restores compliance without new cash — the math is different from a simple cash deposit but equally valid

Common Mistakes With Margin Requirements

Two mistakes account for most of the unpleasant surprises traders report with margin accounts, and both come from underestimating how quickly a comfortable equity cushion at purchase can erode.

Using the maximum available margin on a single position. Borrowing right up to the 50% Regulation T limit leaves the smallest possible buffer before the maintenance requirement. In the worked example, buying with the full 50% loan meant only a 35% price decline triggered a call; borrowing less than the maximum available leverage is one of the simplest ways to build in a larger cushion against ordinary volatility.

Assuming the account will always allow time to respond to a call. Because brokers can liquidate without prior notice, waiting to see if a position will recover before addressing a call is a bet the trader may not get to make. Monitoring equity against the maintenance requirement proactively, with a plan already in place, avoids having the decision made by the broker at whatever price is available.

Practical Checklist Before Trading on Margin

Confirm the specific security is marginable and check whether it carries a higher-than-standard initial margin requirement.
Ask your broker for its house maintenance margin percentage — don't assume the FINRA 25% floor applies to your account.
Calculate how large a price decline would trigger a margin call at your actual leverage level before placing the trade, not after.
Consider borrowing less than the full 50% Regulation T limit to build in a larger equity cushion against ordinary volatility.
Read your margin agreement's language on the broker's right to liquidate without notice — understand this is standard, not an unusual broker practice.
Keep accessible cash or marginable securities set aside so a margin call can be met with a deposit rather than a forced, poorly timed sale.
Track margin interest accrual on the debit balance separately from the equity cushion — meeting a call does not pay down the loan.

Risks, Limitations, and Exceptions

Margin trading can produce losses that exceed the amount originally deposited, since losses are calculated against the full position size, not just the trader's equity contribution.
Specific percentages cited here (50% initial margin, 25% FINRA maintenance floor, 30%–40% typical house requirements) reflect general rules as of mid-2026; always confirm current figures and your specific broker's house requirements directly, since house requirements vary by broker and by security.
Some securities carry higher initial margin requirements than the standard 50%, or are not marginable at all; this guide describes the standard case, not every exception.
Pattern day trading rules, which apply to accounts making four or more day trades within five business days, impose additional requirements (including a $25,000 minimum equity threshold) beyond the standard Regulation T and maintenance margin framework described here.
This guide covers standard Reg T margin for equities in a typical margin account; it does not cover portfolio margin, options margin, or margin rules in accounts outside the United States, which follow different frameworks.
The worked example uses hypothetical numbers for illustration and does not describe or endorse any specific security, broker, or trading outcome.

Frequently Asked Questions

What percentage does Regulation T require for margin purchases?

Regulation T sets the initial margin requirement at 50% for most equity securities. To buy $10,000 of marginable stock, you must deposit at least $5,000 of your own funds, with your broker able to lend the remaining $5,000. This 50% figure has been the Federal Reserve's standard equity initial margin requirement since 1974.

What is the difference between initial margin and maintenance margin?

Initial margin is the minimum equity you must put up at the time you buy on margin, set by Regulation T at 50% for equities. Maintenance margin is the minimum equity you must keep in the account on an ongoing basis after the purchase, set by FINRA Rule 4210 at a 25% minimum, though most brokers set their own house maintenance requirements higher, commonly 30% to 40%. Initial margin is a one-time entry rule; maintenance margin applies every day you hold the position.

Who sets FINRA's maintenance margin requirement, and is it always 25%?

FINRA Rule 4210 sets 25% as the regulatory floor for maintenance margin on long equity positions, but it is only a minimum. Individual brokerage firms are permitted to set higher "house" requirements, and most do, often in the 30% to 40% range for long stock and higher still for volatile or low-priced securities. Always check your specific broker's house requirements rather than assuming the 25% regulatory minimum applies to your account.

What happens when I get a margin call?

A margin call happens when your account equity falls below the maintenance margin requirement, typically because the value of securities purchased on margin has dropped. Your broker will require you to deposit additional cash or securities, or you must sell (liquidate) enough of your holdings, to bring your equity back up to the required level. Brokers can and often do liquidate positions without prior notice if a call is not met, and they can choose which securities to sell.

Does Regulation T apply to day trading?

Regulation T's 50% initial margin still applies to the underlying purchase, but pattern day traders (four or more day trades within five business days in a margin account) are also subject to FINRA's separate pattern day trader rules, including a $25,000 minimum equity requirement and day-trading buying power limits that function differently from standard Reg T margin. Pattern day trading rules are a distinct topic from the general Regulation T framework covered here.

Can my broker sell my stock without telling me first?

Yes. Most margin agreements give the broker the right to sell securities in your account to meet a margin call without prior notice and without giving you the chance to choose which positions are sold or to extend the deadline, even if the sale triggers a taxable capital gain. This is a standard term of margin account agreements, not a broker-specific exception, and it is one of the most commonly misunderstood aspects of trading on margin.

How is Regulation T margin different from portfolio margin?

Regulation T margin ("Reg T margin") uses fixed percentage requirements per position, such as the 50% initial margin on equities. Portfolio margin is a separate, risk-based system approved for certain accounts (generally requiring higher account minimums) that calculates margin based on the modeled risk of the entire portfolio, which can result in lower margin requirements for hedged or diversified positions but also faster-moving, less predictable requirements during volatile markets. Most retail margin accounts use standard Reg T margin, not portfolio margin.

Is a margin call an amount of money I have to pay back like a loan payment?

Not exactly. A margin call is a requirement to restore your account equity to the required level, not a bill for a fixed loan payment. You can meet it either by depositing more cash or marginable securities, or by selling enough of your existing holdings that the debit balance (the amount borrowed) shrinks relative to what remains. The margin loan itself continues accruing interest separately from any specific margin call.

Sources and Methodology

This guide describes Regulation T and FINRA maintenance margin requirements based on publicly available regulatory rules and guidance as of mid-2026. Key sources include:

Federal Reserve Board, Regulation T (12 CFR Part 220): the governing rule setting broker-dealer credit extension limits, including the 50% initial margin requirement on most equity securities referenced throughout this guide.
FINRA Rule 4210, Margin Requirements: FINRA's rule setting the 25% minimum maintenance margin requirement for long equity positions and the broader margin framework, including pattern day trader provisions, referenced in the initial-versus-maintenance-margin comparison.
U.S. Securities and Exchange Commission, Investor Bulletin: Understanding Margin Accounts: the SEC's investor-facing explanation of how margin purchases, margin calls, and forced liquidation work in practice, used as a reference for the margin call mechanics described in this guide.

The worked numeric example in this guide uses a hypothetical stock, purchase price, and price decline constructed for educational purposes and does not describe or endorse any specific security or brokerage account.

This content was reviewed by the Swoopr Editorial Team in August 2026 and reflects publicly available regulatory information at that time. Regulation T percentages have not changed since 1974, but individual broker house maintenance requirements and pattern day trading thresholds can change; confirm current figures directly with your broker before trading on margin.

Conclusion

Regulation T's 50% initial margin requirement answers only one question — how much you must put up to open a margin purchase — while a separate, ongoing maintenance margin requirement, with a 25% FINRA floor and typically higher broker house minimums, determines whether you'll face a margin call as prices move afterward. The worked example above shows how quickly the gap between those two numbers can close: a stock purchased with a comfortable 50% equity cushion needed only a 35% price decline to fall below a 30% house maintenance requirement, triggering a call that required either new cash or a forced reduction of the position. Understanding both rules, and the mechanics of how a margin call is actually resolved, is the baseline for using margin deliberately rather than being surprised by it.