How are Maintenance Requirements on a Stock Determined?
In accordance with the rules of the exchanges, TD Ameritrade places “Initial and Maintenance” margin requirements on accounts. These requirements dictate the amount of equity needed in an account in order to hold and create new margin positions.
All broker/dealers, including TD Ameritrade, Inc., reserve the right at any time to adjust minimum maintenance requirements. This adjustment can be done on an individual account basis as well as on a stock-by-stock basis, depending on a stock's trading volatility and other factors. Your account may be subject to higher margin equity requirements based on how market fluctuations affect your portfolio.
Below are the maintenance requirements for most long and short positions. However, concentrated positions and certain stocks may have special requirements between 35% and 100%.
Non-marginable stocks cannot be used as collateral for a margin loan. Likewise, you may not use margin to purchase non-marginable stocks.
What is a Special Margin requirement?
Some securities have special maintenance requirements that require you to have a higher percentage of equity in your account in order to hold them on margin. Typically, they are placed on positions held in the account that pose a greater risk. These higher-risk positions may include lower-priced securities, highly concentrated positions, highly volatile securities, leveraged positions and other factors. There are no restrictions from trading securities with special maintenance requirements as long as the requirement can be met.
For more information on Concentrated Positions (hyperlink to page) or contact a Margin Specialist at 877-877-0272 ext 1.
Margin trading increases risk of loss and includes the possibility of a forced sale if account equity drops below required levels. Margin is not available in all account types. Margin trading privileges subject to TD Ameritrade review and approval. Carefully review the Margin Handbook and Margin Disclosure Document for more details. Please see our website or contact TD Ameritrade at 800-669-3900 for copies.