What does special margin requirements mean on TD Ameritrade?
What does special margin requirements mean on TD Ameritrade?
There are special maintenance requirements in cases where 50% or more of a total portfolio is concentrated into a single margin position. When this occurs, TD Ameritrade checks to see whether: ... That single position's market value is greater than or equal to the total equity in a margin account.
What are stocks with special margin requirements?
Special Margin Requirements: Stocks Usually these are stocks with a history of volatility, meaning the price changes dramatically. These higher margin requirements mean it can only take a tiny drop in the stock price before the investor has to put up more cash.
What does 40% special margin requirements mean?
Special Margin Requirements: Stockbrokers Some stockbrokers have higher maintenance margin requirements -- often in the range of 30 to 40 percent. The effect is that it takes a smaller drop in the stock price before the investor's equity is too low and the investor is forced to put up extra cash.
What is a special maintenance requirement?
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.
How are margin requirements determined?
Firms typically determine margin requirements by assessing risk at the security level or at the account level. Calculating requirements at the security level takes into account a security's price, volatility, and number of outstanding shares, along with many other factors.
What is margin special maintenance?
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.
What are margin requirements on stocks?
A Margin Requirement is the percentage of marginable securities that an investor must pay for with his/her own cash. It can be further broken down into Initial Margin Requirement and Maintenance Margin Requirement.
What is margin maintenance requirement TD Ameritrade?
Based upon the general maintenance requirements given above, the margin maintenance requirement would be 30% or $1,500. If the stock price fell to $2, the margin maintenance requirement would be 100% or $2,000, and TD Ameritrade, Inc. would issue a margin call for $1,000.