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Published On: Thu, Apr 4th, 2013

Maintenance call

When an investor chooses to purchase on margin, or credit, they must deposit an amount of money into a margin account.  The amount of money depends on the amount of margin the investor wants to use and is regulated by the Federal Reserve Board’s Regulation T.

If the amount of money in the account falls below the amount mandated by Regulation T, the investor will get a maintenance call requiring a deposit to bring the account balance back up to the minimum required balance. If the maintenance call is not answered, requested trades may not go through, or the brokerage holding the margin account may liquidate existing stock assets to bring the account balance back up to the required minimum.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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