Margin Trading

Margin Trading

Stock

US Stocks Margin Requirements for US

As a resident of the US trading stocks in US you are subjected to Rules-based margin and Portfolio Margin. The complete margin requirement details are listed in the sections below. 


The following calculations apply only to Margin, IRA Margin and Cash or IRA Cash. See our Portfolio Margin section for US Options requirements in a Portfolio Margin account. 

FINRA and the NYSE have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to special Day Trading Restrictions for U.S. and non-U.S. securities.

The following table shows stock margin requirements for initial (at the time of trade), maintenance (when holding positions), and Overnight Reg T (Regulatory End of Day Requirement) time periods.

Long Position

Margin
Initial Margin25% 1 * Stock Value (minimum of $2,000 or 100% of the purchase price, whichever is less)
Maintenance Margin25% * Stock Value
Reg T End of Day Initial Margin50% * Stock Value
Cash or IRA Cash100% * Stock Value
IRA MarginSame as Cash

Short Positions

Margin
Initial Margin30% 2 * Market Value of Stock, if Stock Value > $16.67 per share
$5.00 per share, if Stock Value < $16.67 and > $5.00
100% of Market Value of Stock, if Stock Value < $5.00
$2.50 per share, if Stock Value <= $2.50
Maintenance MarginSame as Initial Margin
Reg T End of Day Initial MarginSame as Reg T End of Day for Long Positions.
Cash or IRA CashN/A
IRA MarginSame as Cash

Non-Marginable Long or Short Positions

Margin
Initial Margin100% * Stock Value
Maintenance MarginSame as Initial Margin
Reg T End of Day Initial MarginSame as Initial Margin
Cash, Individual or IRASame as Initial Margin, Only Long Positions
IRA MarginN/A

Special Margin Stocks

We may reduce the collateral value of securities (reduces marginability) for a variety of reasons, including:

  • small market capitalization or small issue size
  • low liquidity in the collective primary/secondary exchanges
  • involvement in tenders and other corporate action

Changes in marginability are generally considered for a specific security. However, in cases of concerns about the viability or liquidity of a company, marginability reductions will apply to all securities issued by, or related to, the affected company, including fixed income, derivatives, depository receipts, etc.

See the section on Decreased Marginability Calculations on the Margin Calculations page for information about large position and position concentration algorithms that may affect the margin rate applied to a given security within an account and may vary between accounts.


US Stocks Margin Requirements for China

Based on your selection to trade stocks in US, you are subjected to the same Rules-based margin and Portfolio Margin as US residents. The complete margin requirement details are listed in the sections below. 


The following calculations apply only to Margin, IRA Margin and Cash or IRA Cash. See our Portfolio Margin section for US Options requirements in a Portfolio Margin account. 

FINRA and the NYSE have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to special Day Trading Restrictions for U.S. and non-U.S. securities.

The following table shows stock margin requirements for initial (at the time of trade), maintenance (when holding positions), and Overnight Reg T (Regulatory End of Day Requirement) time periods.

Long Position

Margin
Initial Margin25% 1 * Stock Value (minimum of $2,000 or 100% of the purchase price, whichever is less)
Maintenance Margin25% * Stock Value
Reg T End of Day Initial Margin50% * Stock Value
Cash or IRA Cash100% * Stock Value
IRA MarginSame as Cash

Short Positions

Margin
Initial Margin30% 2 * Market Value of Stock, if Stock Value > $16.67 per share
$5.00 per share, if Stock Value < $16.67 and > $5.00
100% of Market Value of Stock, if Stock Value < $5.00
$2.50 per share, if Stock Value <= $2.50
Maintenance MarginSame as Initial Margin
Reg T End of Day Initial MarginSame as Reg T End of Day for Long Positions.
Cash or IRA CashN/A
IRA MarginSame as Cash

Non-Marginable Long or Short Positions

Margin
Initial Margin100% * Stock Value
Maintenance MarginSame as Initial Margin
Reg T End of Day Initial MarginSame as Initial Margin
Cash, Individual or IRASame as Initial Margin, Only Long Positions
IRA MarginN/A

Special Margin Stocks

We may reduce the collateral value of securities (reduces marginability) for a variety of reasons, including:

  • small market capitalization or small issue size
  • low liquidity in the collective primary/secondary exchanges
  • involvement in tenders and other corporate action

Changes in marginability are generally considered for a specific security. However, in cases of concerns about the viability or liquidity of a company, marginability reductions will apply to all securities issued by, or related to, the affected company, including fixed income, derivatives, depository receipts, etc.

See the section on Decreased Marginability Calculations on the Margin Calculations page for information about large position and position concentration algorithms that may affect the margin rate applied to a given security within an account and may vary between accounts.


US Stocks Margin Requirements for Europe

As a resident of Europe trading stocks in US you are subjected to Rules-based margin and Portfolio Margin. The complete margin requirement details are listed in the sections below. 


The following table shows stock margin requirements for initial (at the time of trade), maintenance (when holding positions), and Overnight Reg T (Regulatory End of Day Requirement) time periods. 

Long Position

Margin
Initial MarginMargin requirements are determined by risk-based portfolio analysis models specified by each exchange. For details, visit the specific exchange site in question. 
Maintenance Margin25% * Stock Value
Reg T End of Day Margin50%  * Stock Value
Cash or IRA Cash100% * Stock Value

Short Positions

Margin
Initial MarginSame as Initial for long positions
Maintenance MarginSame as Initial for long positions
Reg T End of Day MarginSame as Reg T End of Day for long positions
Cash or IRA CashN/A

Bonds

US Fixed Income Margin Requirements for US

As a resident of the US trading bonds in US you are subjected to Rules-based margin. The complete margin requirement details are listed in the section below.


The following rules apply for Margin and Portfolio Margin accounts. Bonds must be paid-in-full in a Cash account.

FINRA and the NYSE have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to special Day Trading Restrictions for US securities.

Government Bonds Margin

US TREASURY SECURITIESINITIAL MARGIN REQUIREMENTSMAINTENANCE MARGIN REQUIREMENTS
Less than six months to maturity 1% * Market ValueSame as Initial Margin 
Less than one year to maturity 2% * Market ValueSame as Initial Margin 
One year but less than three years to maturity3% * Market ValueSame as Initial Margin 
Three years but less than five years to maturity 4% * Market ValueSame as Initial Margin 
Five years but less than ten years to maturity 5% * Market ValueSame as Initial Margin 
Ten years but less than twenty years to maturity 7% * Market ValueSame as Initial Margin 
Twenty years or more to maturity 9% * Market ValueSame as Initial Margin 
Zero coupon bonds with five years or more to maturity 3% * Principal Amount of the ObligationSame as Initial Margin 

Municipal Bonds

INITIAL MARGIN REQUIREMENTSMAINTENANCE MARGIN REQUIREMENTS
Investment Grade 1.25 * Maintenance Margin 25% * Bond Market Value
Speculative Grade 1.25 * Maintenance Margin 50% * Bond Market Value
Junk Grade 1.25 * Maintenance Margin 75% * Bond Market Value
Defaulted 100% * Bond Market Value 100% * Bond Market Value

Corporate Bonds

The margin for the following types of corporate bonds is determined using a proprietary Value At Risk (VAR) methodology :

  • Investment Grade 
  • NYSE-listed Speculative Grade
  • NYSE-listed Junk Grade

The theoretical price of each bond is calculated over a range of interest rate offsets to the prevailing Treasury yield curve. The result of such a calculation is illustrated in the following figure. As the interest rate offset increases, the bond price decreases. The upward curvature of the line is indicative of the “convexity” of the bond. 

Bonds

The VAR is the worst case loss in the bond price over a specified range of underlying interest rate changes. The scanning ranges are listed in the table below. 

BOND TYPEBASIS POINTS
Investment Grade (Moody’s Aaa to Baa3)200 basis points
NYSE-Listed Speculative Grade (Moody’s Ba1 to B3)300 basis points
NYSE-Listed Junk Grade (Moody’s Caa1 to C)400 basis points

Within the Value At Risk calculation, bonds that contain embedded options (calls or puts) are subjected to stress tests that separately increase and decrease the interest rate period volatilities used to calculate the theoretical price of the bond by 15% of their values. Under each volatility change scenario, another theoretical price curve is calculated over the same range of interest rate offsets to the prevailing Treasury yield curve. The VAR for bonds with embedded options is taken as the worst case loss on the appropriate interest rate scanning range across each of the unchanged, up and down volatility scenarios.

The regulatory minimum margin of 10% of market value applies to investment grade bonds. The regulatory minimum of the larger of 20% of market value and 7% of face value applies to non-investment grade, NYSE-listed bonds.

Non-NYSE-Listed Speculative and Junk Bonds are margined as follows:

BOND TYPEINITIAL MARGINMAINTENANCE MARGIN
Non-NYSE-Listed Speculative Grade50% * Bond Market Value50% * Bond Market Value
Non-NYSE-Listed Junk Grade70% * Bond Market Value70% * Bond Market Value

Bonds that have defaulted or that are not rated are not eligible for margin treatment.


Special Margin Bonds

We may reduce the collateral value of securities (reduces marginability) for a variety of reasons, including:

  • small market capitalization or small issue size
  • low liquidity in the collective primary/secondary exchanges
  • involvement in tenders and other corporate action

Changes in marginability are generally considered for a specific security. However, in cases of concerns about the viability or liquidity of a company, marginability reductions will apply to all securities issued by, or related to, the affected company, including bonds, derivatives, depository receipts, etc.

In addition, please see discussions on special risk management algorithms, for example, large position and position concentration algorithms which may affect the margin rate applied to a given security within an account and may vary between accounts.

US Fixed Income Margin Requirements for China

Based on your selection to trade bonds in US, you are subjected to the same Rules-based margin as US residents. The complete margin requirement details are listed in the section below.

US Fixed Income Margin Requirements for Europe

As a resident of Europe trading bonds in US you are subjected to Rules-based margin. The complete margin requirement details are listed in the section below.


Foreign Sovereign Debt Securities 

LONG POSITIONS 
Initial Margin RequirementsMaintenance Margin Requirements
Rated AAA to AA3:
Less than 6 months to maturity2.5% * Market Value2% * Market Value
Less than 1 year to maturity3.75% * Market Value3% * Market Value
More than 1 year and less than 3 years to maturity6.25% * Market Value5% * Market Value
At least 3 years and less than 5 years to maturity7.5% * Market Value6% * Market Value
At least 5 years and less than 10 years to maturity10% * Market Value8% * Market Value
At least 10 years and less than 20 years to maturity12.5% * Market Value10% * Market Value
20 years or more to maturity15% * Market Value12% * Market Value
Zero coupon bonds with 5 years or more to maturityMin (Market Value, 1.25 * Maintenance)Max (Specified Maintenance 
Amount 3, 3% * Face Value)
Rated A1 – BAA218.75% * Market Value15% * Market Value 
Rated Ba1-B3Min (Market Value, 1.25 * Maintenance)Min (25% Market Value, 10% Face Value)
Rated Caa1-CMin (Market Value, 1.25 * Maintenance)Min (50% Market Value, 20% Face Value) 
Defaulted100% * Market Value100% * Market Value
Not Rated100% * Market Value100% * Market Value

Mutual Funds

US Mutual Fund Margin Requirements for US

As a resident of the US trading mutual funds in US you are subjected to Rules-based margin. The complete margin requirement details are listed in the section below.


The following calculations apply only to Margin and Cash Accounts. 

FINRA and the NYSE have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to special Day Trading Restrictions for US securities.

The following table shows mutual fund margin requirements for initial (at the time of trade) and maintenance (when holding positions).

MARGIN ACCOUNT:
INITIAL MARGIN
MARGIN ACCOUNT:
MAINTENANCE MARGIN
REG T END OF DAYCASH ACCOUNTS
Mutual Fund Long Position
First 30 
days:
100% * Net Asset Value100% * Net Asset Value 100% * Net Asset Value100% * Net Asset Value 
After 30 days:25% * Net Asset Value25% * Net Asset Value50% * Net Asset Value100% * Net Asset Value
Money Market Fund Long Position
1% * Net Asset Value 1
Cannot borrow against for 30 days (no debit balance)
1% * Net Asset Value1
Cannot borrow against for 30 days (no debit balance)
1% * Net Asset Value1
Cannot borrow against for 30 days (no debit balance)
100% * Net Asset Value
Short Positions
N/AN/AN/A
US Mutual Fund Margin Requirements for China

Based on your selection to trade mutual funds in US, you are subjected to the same Rules-based margin as US residents. The complete margin requirement details are listed in the section below.


The following calculations apply only to Margin and Cash Accounts.

The following table shows mutual fund margin requirements for initial (at the time of trade) and maintenance (when holding positions).

MARGIN ACCOUNT:
INITIAL MARGIN
MARGIN ACCOUNT:
MAINTENANCE MARGIN
REG T END OF DAYCASH ACCOUNTS
Mutual Fund Long Position
First 30 
days:
100% * Net Asset Value100% * Net Asset Value 100% * Net Asset Value100% * Net Asset Value 
After 30 days:25% * Net Asset Value25% * Net Asset Value50% * Net Asset Value100% * Net Asset Value
Money Market Fund Long Position
1% * Net Asset Value 1
Cannot borrow against for 30 days (no debit balance)
1% * Net Asset Value 1
Cannot borrow against for 30 days (no debit balance)
1% * Net Asset Value 1
Cannot borrow against for 30 days (no debit balance)
100% * Net Asset Value
Short Positions
N/AN/AN/A
  • “Non-US funds” available with the following restrictions: U.S., Canada, Iran, North Korea, Libya, Syria and U.S. territories Puerto Rico, U.S. Virgin Islands, American Samoa and Northern Marianas Islands.
  • Margin Requirements and info the same as US ones