05-15-2021, 09:41 AM
Reg-T margin requirement clarification
<!-- SC_OFF --><div class="md"><p>I wish to double confirm about some Reg-T margin requirements.</p> <p>Let say I have $100,000 cash. The Reg-T initial margin is $33,000 for an ETF. The Reg-T maintenance margin is $30,000. </p> <p>[1] Does it mean that I can buy up to around $300,000 of the ETF (3x leverage), where the Reg-T initial margin is around $99,000 (3 times of $33,000 initial margin)? </p> <p>[2] If the answer is yes for [1], does it mean that I need to ensure the $300,000 ETF bought does not fall to below $90,000 (3 times of $30,000 maintenance margin) to prevent margin call? This implies a -70% drop, which is very lenient.</p> <p>Thanks!</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/LimeEfficient"> /u/LimeEfficient </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/ncu4dj/regt_margin_requirement_clarification/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/ncu4dj/regt_margin_requirement_clarification/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>I wish to double confirm about some Reg-T margin requirements.</p> <p>Let say I have $100,000 cash. The Reg-T initial margin is $33,000 for an ETF. The Reg-T maintenance margin is $30,000. </p> <p>[1] Does it mean that I can buy up to around $300,000 of the ETF (3x leverage), where the Reg-T initial margin is around $99,000 (3 times of $33,000 initial margin)? </p> <p>[2] If the answer is yes for [1], does it mean that I need to ensure the $300,000 ETF bought does not fall to below $90,000 (3 times of $30,000 maintenance margin) to prevent margin call? This implies a -70% drop, which is very lenient.</p> <p>Thanks!</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/LimeEfficient"> /u/LimeEfficient </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/ncu4dj/regt_margin_requirement_clarification/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/ncu4dj/regt_margin_requirement_clarification/">[comments]</a></span>Kind Regards R