Log in Create a free account
web3glossarymaintenance margin
Maintenance Margin

Summary

The minimum amount of equity that must be maintained in a margin account after a trade is executed.

Detailed Description

Maintenance margin is a standard in trading that dictates the minimum amount of funds an investor must maintain in their margin account after purchasing securities on margin. If the equity in the account drops below this threshold, the broker may issue a margin call, requiring the trader to deposit more funds or liquidate positions to restore the equity to the required level. This requirement helps mitigate the risk for brokers in case the value of traded securities decreases significantly.

Category
Trading & Investing
Synonyms
Minimum Equity Requirement
Maintenance Requirement

Impact Details

2 impact insights hidden

Yirifi's stakeholder, regulatory-compliance, and risk-impact analysis for this term.

Create a free accountLog in

Trading on Margin

Investors use maintenance margin when trading stocks or commodities with borrowed funds, which allows them to amplify their returns.

Industries:

Finance
Investment Banking

Platforms:

Online Brokerage Platforms
Trading Apps
Leveraged Buying

Traders may leverage their positions using margin accounts, requiring them to maintain certain equity levels.

Industries:

Retail Trading
Hedge Funds

Platforms:

Stock Market Exchanges
Options Trading Platforms

Top Metrics

Yirifi's top metrics for this term.

Create a free accountLog in

FAQs

4 FAQs hidden

Yirifi's FAQs for this term.

Create a free accountLog in