{"id":179402,"date":"2021-05-10T15:26:00","date_gmt":"2021-05-10T19:26:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/glossary-terms\/reg-t-margin\/"},"modified":"2025-04-07T14:49:26","modified_gmt":"2025-04-07T18:49:26","slug":"reg-t-margin","status":"publish","type":"glossary-terms","link":"https:\/\/www.interactivebrokers.com\/campus\/glossary-terms\/reg-t-margin\/","title":{"rendered":"Reg T Margin"},"content":{"rendered":"<p>Reg T Margin (short for Regulation T margin) is a rule set by the Federal Reserve Board that governs how much money an investor can borrow from a broker to buy securities (stocks, ETFs, etc.). It&#8217;s part of the broader margin trading system in the United States.<\/p>\n<h3>Key Points of Reg T Margin<\/h3>\n<h4>Initial Margin Requirement:<\/h4>\n<p>Under Regulation T, you can borrow up to 50% of the purchase price of a security.<\/p>\n<p>This means you must put up at least 50% cash or fully paid securities\u2014the rest can be borrowed from the broker.<\/p>\n<p>Example:<\/p>\n<p>If you want to buy $10,000 worth of stock, you need to put up at least $5,000 of your own money.<\/p>\n<p>The broker lends you the other $5,000.<\/p>\n<h4>Applies to New Purchases:<\/h4>\n<p>Reg T covers the initial margin when you first buy a security on margin.<\/p>\n<p>Ongoing margin requirements (called maintenance margin) are typically regulated by FINRA or the broker and are often around 25% of the value of the securities.<\/p>\n<h4>Settle Within Two Days (T+2):<\/h4>\n<p>Reg T requires that you pay for securities within two business days after the trade date. If not, the broker may have to liquidate your position.<\/p>\n<h4>Only for Margin Accounts:<\/h4>\n<p>Reg T doesn\u2019t apply to cash accounts\u2014only to margin accounts, where you&#8217;re borrowing money to invest.<\/p>\n<h4>How Reg-T Margin Works on IBKR TWS<\/h4>\n<p>Reg T Margin is a rule-based margin system with fixed percentages for predefined strategies set by the Federal Reserve Board.<\/p>\n<p>Key features include:<\/p>\n<ul>\n<li>Fixed requirements of 25% for intraday trading (4:1 leverage) and 50% for overnight positions (2:1 leverage)<\/li>\n<li>Standard margin rules apply<\/li>\n<li>Includes a Special Memorandum Account (SMA) used to calculate limits for overnight position sizes<\/li>\n<li>No specific minimum equity requirement<\/li>\n<li>Uses formula-based margin for options trading<\/li>\n<li>IBKR may apply House Risk Based margin or IBKR Concentrated margin to positions<\/li>\n<\/ul>\n<p>The margin calculation uses fixed percentages applied to predefined combination strategies, unlike Portfolio Margin which uses a risk-based approach.<\/p>\n<h4>Margin Call Monitoring<\/h4>\n<p><strong>Interactive Brokers does not make margin calls.<\/strong> Instead, real-time liquidations occur when an account has a margin deficiency. Due to fast-moving markets, accounts generally will not have time to deposit funds to meet a margin deficiency. While IBKR attempts to send margin deficit notifications on a best-efforts basis, this may not always be possible. To monitor margin compliance, users should track their Excess Liquidity and Special Memorandum Account (SMA) values, which can be viewed in TWS under Account &gt; Account Window in the Available for Trading section.<\/p>\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A type of IBKR\u00a0margin account with greater margin requirements than a portfolio margin account, but with a potential for lower concentrated risk. The initial margin requirements calculated under US\u00a0Regulation T rules for both the securities and commodities segment of your account.<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","meta":{"_acf_changed":false,"footnotes":""},"traders-glossary":[13268,13251],"class_list":{"0":"post-179402","1":"glossary-terms","2":"type-glossary-terms","3":"status-publish","5":"traders-glossary-trading-terms-r","6":"traders-glossary-trading-alphabet"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Archives Term | IBKR Glossary | IBKR Campus<\/title>\n<meta name=\"description\" content=\"The initial margin requirements calculated under US Regulation T rules for both the securities and commodities segment of your account.\" \/>\n<meta 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