Margin maintenance is the minimum portfolio value you need to maintain to avoid borrowing too much money in your account. You can see your margin maintenance amount in your account settings.
Each stock you own has its own maintenance requirement, based primarily on its volatility. Stocks that are known to be risky, for example, typically have higher maintenance requirements to ensure you have more cash in your account to cover the position if it decreases in value.
You have $5,000 in cash and hold no positions. You receive an additional $5,000 of Gold Buying Power for a total buying power of $10,000.
ABC is trading at $20.00 per share and has a stock maintenance requirement of 25%. This means a $10,000 purchase would require $2,500 ($10,000 x 0.25) in account value to back the purchase. You’ll be able to use all $10,000 of buying power to purchase 500 ABC at $20.00 per share.
You have $10,000 in cash and hold no positions. You receive an additional $10,000 of Gold Buying Power for a total buying power of $20,000.
XYZ is trading at $50.00 per share and has a stock maintenance requirement of 75%. This means a $20,000 purchase would require $15,000 ($20,000 x 0.75) in account value to back the purchase. You won’t be able to use all $20,000 of buying power to purchase XYZ since your account value is lower than the stock’s maintenance requirement.