View and understand margin maintenance requirements
The following list shows the different kinds of securities and positions you can hold on margin in your account and the initial and maintenance requirements for each.
Legend:
Notes:
The initial margin and margin maintenance requirements are two important requirements to keep in mind when trading on margin. Let's take a closer look at each.
The initial margin requirement represents the amount of equity you'd need in your account to be able to purchase the security in the first place. Normally, this represents at least 50% of the total value of the order. For example, all things being equal, and presuming no other debits in your account, to borrow $10,000 for trading, you'd need to have $5,000 in cash or $10,000 in paid-for marginable securities (or a combination thereof).
The margin maintenance requirement is the amount of equity you'd need to keep in your account without entering into a call. This can be less than the initial requirement, and varies based on the security, Federal Reserve regulations (known as Regulation T), and E*TRADE Securities' internal guidelines. In general, you'll need to have at least 30% in equity (in relation to the value of the stock) to prevent a call. For example, if you've purchased $10,000 worth of stock, you'd probably need to keep (maintain) at least $3,000 in equity in the account to avoid a call. There are also a number of specific stocks with special margin maintenance requirements that are higher, in general, than our minimum requirements. This list is updated regularly.
Borrowing on margin isn't for everyone. Before using margin, determine whether this type of trading strategy is right for you given your specific investment objectives, experience, risk tolerance, and financial situation. For more complete information, please read the FINRA Margin Disclosure Statement.
Legend:
- MV: Market Value of the stock
- Out of the Money: The condition of an option when the underlying stock's current market price is below the strike price in the case of a call, or above the strike price in the case of a put.
- Marginable Securities: Includes most listed and NASDAQ stocks and securities.
| Type of Security | Initial Margin Req. (Minimum $2,000 equity) |
Margin Maintenance Req. (Minimum $2,000 equity) |
| Long Stocks and Warrants:Below $2.00/Share | 100% market value |
100% market value |
| $2.00 - $2.99/Share | $1.50/Share | $1.50/Share |
| Over $3.00/Share | The greater of 50% or special margin requirement |
The greater of 30% or special margin requirement |
| Long Non-Leveraged and Leveraged ETFs | The greater of 50% or special margin requirement |
The greater of (i) 25% multiplied by the leverage multiple, (ii) 30% market value, or (iii) special margin requirement |
| Short Leveraged ETFs | The greater of 50% or special margin requirement |
The greater of 30% times the leverage multiple or special margin requirement |
| IPOs (Where E*TRADE Securities participates in the offering) | 100% market value | 100% market value for 30 days |
| Short Sales with Stock Price: Below $3.00/Share | The greater of $2.50/Share or 100% market value |
The greater of $2.50/Share or 100% market value |
| $3.00 - $4.99/Share | 100% market value | 100% market value |
| Over $5.00/Share | The greater of 50% market value or special margin requirement |
The greater of $5.00/Share, 30% market value or special margin requirement |
| Short vs. Box | N/A ($2,000 Minimum equity) |
5% market value ($2,000 Minimum equity) |
| Long Calls and Puts | 100% of premium | None |
| Covered Options | Number of shares of underlying stock must equal number of shares in contract | Note: LEAPS may have additional requirements |
| Credit Equity Spreads | Difference between strikes times number shares times number contracts, proceeds from the trade credit included | Difference between strikes times number shares times number contracts, proceeds from the trade credit included |
| Credit Index Spreads | Difference between strikes times number shares times number contracts, proceeds from the trade credit included | Difference between strikes times number shares times number contracts, proceeds from the trade credit included |
| Debit Equity Spreads | Trade debit | --- |
| Debit Index Spreads | Trade debit | --- |
| *Naked Calls | - Equity and Narrow-Based Index Options: Proceeds of the sale plus 20% of the underlying value less out of the money amount OR proceeds of sale plus 15% of underlying value, whichever is greater. - Broad-Based Index Options: Proceeds of the sales plus 15% of the index value less out of the money amount OR proceeds of sales plus 10% of the underlying index value, whichever is greater. - Securities with special maintenance requirements: Proceeds of the sale plus the greater of: 20% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying value. - Underlying equity trades $2-$2.99: Proceeds of the sale plus the greater of: 75% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying value. - Underlying equity trades below $2: Proceeds of the sale plus 100% of the underlying value less out of the money amount OR Proceeds of sale plus 15% of the underlying value, whichever is greater. - Leveraged ETF Options (Narrow-Based Index Options): Proceeds of the sale plus (greater of 20% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (15% times leverage multiple1) of the underlying value, whichever is greater. - Leveraged ETF Options (Broad-Based Index Options): Proceeds of the sale plus (greater of 15% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (10% times leverage multiple1) of underlying value, whichever is greater. 1 Select symbols will instead use (greater of 15% times leverage multiple or special maintenance requirement) Naked Calls are subject to a $250.00 per contract minimum. |
- Equity and Narrow-Based Index Options: Proceeds of the sale plus 20% of the underlying value less out of the money amount OR proceeds of sale plus 15% of underlying value, whichever is greater. - Broad-Based Index Options: Proceeds of the sales plus 15% of the index value less out of the money amount OR proceeds of sales plus 10% of the underlying index value, whichever is greater. - Securities with special maintenance requirements: Proceeds of the sale plus the greater of: 20% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying value. - Underlying equity trades $2-$2.99: Proceeds of the sale plus the greater of: 75% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying value. - Underlying equity trades below $2: Proceeds of the sale plus 100% of the underlying value less out of the money amount OR Proceeds of sale plus 15% of the underlying value, whichever is greater. - Leveraged ETF Options (Narrow-Based Index Options): Proceeds of the sale plus (greater of 20% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (15% times leverage multiple1) of the underlying value, whichever is greater. - Leveraged ETF Options (Broad-Based Index Options): Proceeds of the sale plus (greater of 15% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (10% times leverage multiple1) of underlying value, whichever is greater. 1 Select symbols will instead use (greater of 15% times leverage multiple or special maintenance requirement) Naked Calls are subject to a $250.00 per contract minimum. |
| *Naked Puts | Requirement is capped to 100% of strike for all scenarios below. - Equity and Narrow-Based Index Options: Proceeds of the sale plus 20% of the underlying value less out of the money amount OR proceeds of sale plus 15% of strike price, whichever is greater. - Broad-Based Index Options: Proceeds of the sales plus 15% of the index value less out of the money amount OR proceeds of sales plus 10% of the strike price, whichever is greater. - Securities with special maintenance requirements: Proceeds of the sale plus the greater of: 20% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying strike price. - Underlying equity trades $2-$2.99: Proceeds of the sale plus the greater of: 75% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying strike price. Underlying equity trades below $2: 100% of the underlying value less out of the money amount OR Proceeds of sale plus 15% of the underlying strike price, whichever is greater. - Leveraged ETF Options (Narrow-Based Index Options): Proceeds of the sale plus (greater of 20% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (15% times leverage multiple1) of the strike price, whichever is greater. - Leveraged ETF Options (Broad-Based Index Options): Proceeds of the sale plus (greater of 15% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (10% times leverage multiple1) of the strike price, whichever is greater. 1 Select symbols will instead use (greater of 15% times leverage multiple or special maintenance requirement) Naked Puts are subject to a $250.00 per contract minimum. |
Requirement is capped to 100% of strike for all scenarios below. - Equity and Narrow-Based Index Options: Proceeds of the sale plus 20% of the underlying value less out of the money amount OR proceeds of sale plus 15% of strike price, whichever is greater. - Broad-Based Index Options: Proceeds of the sales plus 15% of the index value less out of the money amount OR proceeds of sales plus 10% of the strike price, whichever is greater. - Securities with special maintenance requirements: Proceeds of the sale plus the greater of: 20% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying strike price. - Underlying equity trades $2-$2.99: Proceeds of the sale plus the greater of: 75% of the underlying value less out of the money amount OR A percentage equal to the special maintenance requirement less out of the money amount OR 15% of the underlying strike price. Underlying equity trades below $2: 100% of the underlying value less out of the money amount OR Proceeds of sale plus 15% of the underlying strike price, whichever is greater. - Leveraged ETF Options (Narrow-Based Index Options): Proceeds of the sale plus (greater of 20% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (15% times leverage multiple1) of the strike price, whichever is greater. - Leveraged ETF Options (Broad-Based Index Options): Proceeds of the sale plus (greater of 15% times leverage multiple or special maintenance requirement) of the underlying value less out of the money amount OR proceeds of the sale plus (10% times leverage multiple1) of the strike price, whichever is greater. 1 Select symbols will instead use (greater of 15% times leverage multiple or special maintenance requirement) Naked Puts are subject to a $250.00 per contract minimum. |
| Married Puts | 50% of the underlying value plus 100% of the option premium | Lower of: (1) 10% of the put exercise price plus 100% of any out-of-the-money amount, or (2) 30% of the current long stock value |
| Collars | 50% of the underlying value plus 100% of net option premium (if debit) | Lower of: (1) 10% of the put exercise price plus 100% of any put out-of-the-money amount, or (2) 30% of the call exercise price |
| Long Butterflies | Net premium | n/a |
| Short Butterflies | Either:
|
Either:
|
| Long Iron Butterflies | Net premium | n/a |
| Short Iron Butterflies | The greater of these two values:
|
The greater of these two values:
|
| Long Condors | Net premium | n/a |
| Short Condors | Either:
|
Either:
|
| Long Iron Condors | Net premium | n/a |
| Short Iron Condors | The greater of these two values:
|
The greater of these two values:
|
| **Universal Spreads | Maximum risk (maximum possible loss) of all positions viewed together | Maximum risk (maximum possible loss) of all positions viewed together |
| Mutual Funds | 100% market value | After 30 days:
|
| U.S. Treasury Bonds (Based on time to maturity) |
Less than 1 year |
5% market value | 1% market value |
| 1 - 3 years | 5% market value | 2% market value | |
| 3 - 5 years | 5% market value | 4% market value | |
| 5 - 10 years | 6% market value | 6% market value | |
| 10 - 20 years | 8% market value | 8% market value | |
| Greater than 20 years |
10% market value | 10% market value |
| U.S. Government Agencies (GNMA, FNMA, Strip's, etc.) |
10% market value | 10% market value |
| Convertible Bonds | 50% market value | 30% market value |
| Corporate Non-Convertible Bonds Rated Baa3 or BBB- (or better) (Baa3 = Moody / BBB- = S&P) |
30% market value | 25% market value |
| Municipal Bonds Rated Baa3 or BBB- (or better) (Baa3 = Moody / BBB- = S&P) |
30% market value | 25% market value |
| Other Bonds | 100% market value | 100% market value |
Notes:
- *To place a naked equity put trade (Level 3) or any Level 4 trade, you must have equity of at least $5,000 in your margin account. Additional orders may not be accepted if their execution would reduce your equity below $5,000.
- ** A Universal Spread is a spread meeting certain conditions as set forth in amendments made to FINRA Rule 4210 by Regulatory Notice 12-44. Specifically, these amendments allow for the pairing of option-only spreads where the risks offset each other and the total risk of the combined spread is less than the sum of the risks of each individual spread. In general, option spreads with limited risk will be combined into a Universal Spread for margin pairing whenever (a) the position set is eligible and (b) the Universal Spread results in a lower margin maintenance requirement. Please note that at this time, option positions can only be combined into a Universal Spread on an all-or-none basis.
Example: A short 40-55 put spread and a short 60-70 call spread with the same expiration have requirements of $1500 and $1000 respectively. But since it is not possible for both spreads to lose money at expiration (the stock cannot close below 55 and above 60), they can be combined into a Universal Spread with a requirement of $1500 instead of $2500 (since $1500 is the maximum possible loss). - We reserve the right to change this list of positions and requirements at any time without notice.
The initial margin and margin maintenance requirements are two important requirements to keep in mind when trading on margin. Let's take a closer look at each.
The initial margin requirement represents the amount of equity you'd need in your account to be able to purchase the security in the first place. Normally, this represents at least 50% of the total value of the order. For example, all things being equal, and presuming no other debits in your account, to borrow $10,000 for trading, you'd need to have $5,000 in cash or $10,000 in paid-for marginable securities (or a combination thereof).
The margin maintenance requirement is the amount of equity you'd need to keep in your account without entering into a call. This can be less than the initial requirement, and varies based on the security, Federal Reserve regulations (known as Regulation T), and E*TRADE Securities' internal guidelines. In general, you'll need to have at least 30% in equity (in relation to the value of the stock) to prevent a call. For example, if you've purchased $10,000 worth of stock, you'd probably need to keep (maintain) at least $3,000 in equity in the account to avoid a call. There are also a number of specific stocks with special margin maintenance requirements that are higher, in general, than our minimum requirements. This list is updated regularly.
Borrowing on margin isn't for everyone. Before using margin, determine whether this type of trading strategy is right for you given your specific investment objectives, experience, risk tolerance, and financial situation. For more complete information, please read the FINRA Margin Disclosure Statement.