A cash account pays the whole purchase price. A margin account borrows part of it, and Regulation T lets a broker lend up to 50 percent of the purchase price of margin securities. Underneath that loan sits a floor: FINRA Rule 4210(c)(1) sets maintenance margin at 25 percent of the current market value of margin securities held long, and most firms run 30 to 40 percent instead. The balance, not the paperwork, decides which account you are running day to day, because a margin account funded entirely with your own money carries the option to borrow and none of the debt.

Three numbers open a margin account and keep it open

The entry ticket comes first. Before any borrowing, FINRA requires a deposit of $2,000 or 100 percent of the purchase price of the margin securities, whichever is less, and Rule 4210(b) states the same $2,000 equity minimum, except that cash need not be deposited in excess of the cost of any security purchased. Some firms ask for more.

The second number is Regulation T's 50 percent initial margin, the ceiling on the loan itself. The third is maintenance: the equity that has to stay in the account after the purchase, where equity is the value of your securities less what you owe the firm, and FINRA rules put the requirement at least 25 percent of the total market value of the margin securities. Short positions carry their own schedule. Rule 4210(c)(3) requires $5.00 per share or 30 percent of current market value, whichever is greater, on a stock priced at $5.00 or more, and (c)(2) requires $2.50 per share or 100 percent of market value below $5.00.

Those are the figures in FINRA Rule 4210 as it stands on 17 September 2026. Firms are free to sit above all three. That is why two accounts holding identical stock can face different calls on the same afternoon.

Example: $16,000 of stock at two maintenance levels

This is the arithmetic in the SEC's margin bulletin of 10 June 2021, and a mechanism rather than a strategy. Buy $16,000 of securities with $8,000 of your own money and an $8,000 margin loan, then watch the market value fall to $12,000. Equity is $12,000 minus the $8,000 loan, or $4,000.

At a 25 percent maintenance requirement the account must hold 0.25 times $12,000, which is $3,000. The $4,000 clears it. At a 40 percent house requirement the account must hold 0.40 times $12,000, which is $4,800, so the same $4,000 is $800 short and the firm issues a margin call for the shortfall. Nothing about the position changed between those two lines. The percentage did.

The loss side scales the same way. A stock bought at $50 that falls to $15 costs 70 percent of fully paid money, and more than 100 percent of the $25 put up on margin, leaving $10 owed to the broker plus interest. The same arithmetic runs in the other direction when the position works, which is what leverage does to the size of a move.

The cash account's rule is settlement, not leverage

A cash account has no maintenance requirement because it has no loan. Its constraint is timing. Regulation T authorizes a broker-dealer to buy a security in a cash account when there are sufficient funds in the account, or when the firm accepts in good faith the customer's agreement to promptly make full cash payment before selling it.

Sell before that payment is made and you have free-ridden. Freeriding is not permitted under Regulation T and can require the broker to freeze the account for 90 days, during which purchases are still allowed but have to be paid for in full on the trade date. That clock runs on the one-business-day settlement cycle, not on the calendar.

Interest, notice, and the broker's right to sell first

A margin loan accrues interest, and the rate is the firm's. The margin agreement describes how interest is calculated, and in general a firm must give a customer at least 30 days' written notice of changes in the method of computing interest.

The sharper term is the one about liquidation. A brokerage firm can sell securities without consulting the customer first, the customer does not choose which securities are sold, the firm can raise its own margin requirements without advance notice, and no customer is entitled to an extension of time on a margin call. That sequence is how a call ends in liquidation.

Day-trading margin changed on 4 June 2026

The frequent-trading layer on top of a margin account is the part in motion. FINRA adopted new intraday margin requirements that replace the day trading margin requirements, effective 4 June 2026, with a transition period until 20 October 2027 for firms that need more time. Under the old framework, a customer designated a pattern day trader faced a $25,000 minimum equity requirement and day-trading buying power of four times maintenance margin excess as of the previous close for equity securities.

Which of the two frameworks your account sits under today is a question for the firm, not for the rulebook, and it changes the numbers on the screen. The mechanics of that transition decide what a day trade costs you in equity.

Source references

Primary sources used for this guide. Follow the links for the original scope, definitions and conditions.