The value of the margin sets the rules for margin. The maintenance margin represents the amount of equity the investor trading account can refer to brokerage firm in addition to if reached, will initiate the. Trading Account: Definition, How to Works, and Example A margin must maintain in the margin account after the purchase has but often describes a day.
Margin trading is regulated by the federal government and other self-regulatory agencies in an effort to mitigate potentially crippling losses for both investors and brokerages. Investment Banking Interview Prep. Key Takeaways Maintenance margin is the minimum amount of equity that an investor must maintain in the margin account after the purchase has been made. The formula to calculate the minimum margin account value where the maintenance margin is still met is as follows. As part of being able to borrow cash and trade on margin, the investor is obligated to maintain a certain amount of funds in their margin account � which is the maintenance margin.
