As a resident of trading stocks in Europe you are subjected to Rules-based margin and Risk-based margin. The complete margin requirement details are listed in the sections below.
The following table shows stock margin requirements for initial (at the time of trade), maintenance (when holding positions), and Overnight Reg T (Regulatory End of Day Requirement) time periods.
|Initial Margin||Margin requirements are determined by risk-based portfolio analysis models specified by each exchange. For details, visit the specific exchange site in question.|
|Maintenance Margin||Same as Initial|
|Reg T End of Day Margin||50% 1 * Stock Value|
|Cash or IRA Cash||100% * Stock Value|
|Initial Margin||Same as Initial for long positions|
|Maintenance Margin||Same as Initial for long positions|
|Reg T End of Day Margin||Same as Reg T End of Day for long positions|
|Cash or IRA Cash||N/A|
A risk based margin system evaluates your portfolio to set your margin requirements. The risk valuations of your positions are created using simulated market movements that anticipate possible outcomes. As a result, a more accurate margin model is created, allowing the investor to increase their leverage.
Within a group of positions with the same underlying, 100% of the gain at any one valuation point is allowed to offset another positions loss at the same valuation point.
Example: An account holds a long stock position in stock ABC and a long put option contract in ABC. If a theoretical worst case scenario causes the underlying asset to drop 15%, then the loss that on the long stock position would be offset by the gain on the long put position.
Eligibility requirements vary according to the investor’s personal information, region, and exchange.
All positions in margin equity securities (including foreign equity securities and options on foreign equity securities, listed options on an equity security or index of equity securities, security futures products, unlisted derivatives on an equity security or index of equity securities, warrants on an equity security or index of equity securities, broad-based index futures, and options on broad-based index futures.