What is the Initial Margin Requirement?
Initial margin requirement refers to the quantity of cash or collateral that needs to be provided to acquire marginable securities.
Margin accounts have a minimum equity requirement of $2,000. Finance industry regulations, Reg T or Regulation T, generally require 50% equity for new trades on margin. Meaning, you are limited to borrowing no more than 50% of the total investment price for new trades in a margin account.
What is Margin Maintenance?
Margin maintenance is the minimum portfolio value, between cash and marginable securities, that you need in your account to prevent a margin call. Marginable securities include stocks, ETFs, mutual funds, and bonds.
In accordance with Reg T, the required minimum amount of maintenance margin for the majority of positions is twenty-five percent. This means that a minimum of 25% of the value of securities held in the account needs to be kept as cash or collateral at all times.
Brokerage firms will often require higher maintenance requirements beyond the regulatory minimums.
Each underlying position will have its own maintenance requirements, which is visible on the individual asset page. For example, an XYZ stock may have a maintenance requirement of 50%, whereas, an XYZ 5.0% 04/15/2026 bond may have a maintenance requirement of 20%.
The total sum of the requirements from all of your positions is the minimum maintenance that you’re required to hold in your account. You will also find this information located in the “Margin Account” tab of your “Account Settings”.
In this same example, let’s say you owned $10,000 of XYZ stock, which had a maintenance requirement of 50%, and $10,000 of an XYZ 5.0% 04/15/2026 bond with a 20% maintenance requirement.
Your minimum maintenance requirement would be $7,000 ($10,000*.5 + $10,000*.20).
Some complex options strategies also hold their own unique margin requirement based on the maximum risk of that position.
You can find the margin requirements for each security on the individual security’s page:
The maintenance requirements protect account holders by requiring them to keep a certain amount of collateral in the account at all times, even if the value of their assets drops. Certain securities, specifically those with a high degree of volatility, will have greater margin requirements than others.
If you have fallen below the minimum maintenance requirements, a margin maintenance call will be assessed.
What is a maintenance call?
If the net asset value (the portfolio value of your cash and marginable equity minus any margin usage) in your account falls below the minimum maintenance requirements due to a decline in the value of your holdings, Public will issue a “margin maintenance call.”
A maintenance call requires you to deposit additional cash or acceptable collateral into your account, and may also be met by market appreciation of your marginable assets. Public may increase its margin maintenance requirements at any time without prior notice.
Public will send you notifications when your portfolio is at risk of a maintenance call - when your portfolio value drops within a moderate distance of your maintenance requirement. You will receive a margin call (in-app push notifications and an email) when the portfolio value drops below the margin maintenance requirement or under the regulatory minimum of $2,000.
Public may close out some or all of the securities in your account without contacting you in order to cover any maintenance calls, even prior to the call’s due date. You are not entitled to an extension of time on a margin maintenance call. After liquidation, your account may have no value, and you may still owe Public for the original margin loan.
You can learn more about the different call types here, but also please reach out to member support at support@public.com if you have any additional questions.