Glossary
Initial margin
The share of a purchase price an investor must pay with their own money when buying on margin; 50% for US stocks under Regulation T.
Initial margin is the minimum portion of a securities purchase that you must fund with your own equity, rather than with money borrowed from your broker, when you open a position in a margin account. For most US stocks, the Federal Reserve's Regulation T sets it at 50% of the purchase price, so a broker may lend up to the other half. It is the first of two margin tests; once the position is open, the lower maintenance margin applies.
How it works
Other requirements stack on top
- FINRA minimum. FINRA Rule 4210 requires at least $2,000 of equity in a margin account before you can trade with borrowed funds.
- Maintenance. After purchase, equity must stay at or above 25% of the position's market value under FINRA rules; falling below triggers a margin call.
- House rules. Brokers can and often do set stricter requirements, up to 100% for volatile, low-priced or concentrated positions.
- Intraday trading. FINRA's 2026 amendments to Rule 4210 replaced the old pattern-day-trader requirements with an intraday margin standard, effective June 4, 2026, with firms allowed to phase it in until October 20, 2027.
The term also appears in futures, where "initial margin" is a performance deposit set by the exchange, typically a much smaller fraction of contract value, not a down payment on a loan.