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Topic
Margin
16 guides in Finabase Learn
- Buying on margin: how margin loans, interest and leverage work How buying stock on margin works under Reg T and FINRA rules, what interest costs, and how leverage magnifies gains and losses, with fully worked examples.
- Cash vs margin accounts: differences, rules and which fits you How cash and margin brokerage accounts differ on borrowing, settlement, short selling, minimums and risk, with the 2026 US rules and a side-by-side comparison.
- Collateral An asset pledged to secure a loan, which the lender may take if the borrower fails to repay.
- Day Trading Buying and selling securities within the same trading day, closing all positions before the market closes.
- Futures margin and leverage: initial, maintenance and margin calls How futures margin works as a performance bond: initial and maintenance levels, daily variation margin, margin calls and leverage, worked through one crude contract.
- 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.
- Leverage Using borrowed money or derivatives to increase the size of a position, magnifying both gains and losses.
- Maintenance margin The minimum equity that must be kept in a margin account, at least 25% under FINRA rules; falling below it triggers a margin call.
- Margin account A brokerage account that lets the holder borrow from the broker against securities to buy more or to sell short.
- Margin call A broker's demand to add cash or securities, or sell holdings, when a margin account's equity falls below the required level.
- Naked option Selling an option without owning the underlying or an offsetting position; a naked call has theoretically unlimited risk.
- Pattern day trader The FINRA label for a margin customer making 4+ day trades in 5 business days, with a $25,000 minimum; replaced in 2026 with a phase-in to 2027.
- Pattern day trader rule: the legacy PDT test and the 2026 replacement How the old PDT rule counted day trades, why FINRA replaced it with intraday margin in June 2026, and how to tell which version your broker still applies.
- Regulation T The Federal Reserve rule (12 CFR 220) on broker credit: up to 50% of a margin purchase can be borrowed, plus cash-account payment rules.
- Short selling Selling borrowed shares in the hope of buying them back later at a lower price, with the profit, the borrow costs and the theoretically unlimited risk explained.
- Short selling explained: borrowing, fees, rules and unlimited risk How a short sale works step by step: the locate and close-out rules, borrow fees, dividends you owe, margin, and why a short position has no ceiling on its loss.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.