Maintenance margin

Maintenance margin,

Definition of Maintenance margin:

  1. The minimum account value an investor is required to maintain to continue holding one or more futures contracts. The dollar value for maintenance margin varies by the specific commodity or financial instrument. An account that falls below the combined maintenance margin for all positions in the account will receive a margin call and be subject to full or partial liquidation. Compare to Initial Margin. See Margin.

  2. Maintenance margin is the minimum equity an investor must hold in the margin account after the purchase has been made and is currently set at 25% of the total value of the securities in a margin account as per Financial Industry Regulatory Authority (FINRA) requirements.

  3. Although FINRA requires a 25% minimum maintenance margin, many brokerage firms may require that as much as 30% to 40% of the securities' total value should be available. Maintenance margin is also called a minimum maintenance or maintenance requirement.

How to use Maintenance margin in a sentence?

  1. The investor may be hit with a margin call if the account equity falls below the maintenance margin threshold which may necessitate that the investor liquidate positions until the requirement is satisfied.
  2. Maintenance margin is currently set at 25% of the total value of the securities in a margin account as per FINRA requirements.
  3. Maintenance margin is the minimum amount of equity that an investor must maintain in the margin account after the purchase has been made.

Meaning of Maintenance margin & Maintenance margin Definition