| |
| | Investor Tips: Margin - Borrowing Money To Pay for Stocks |
 | | Before trading on margin, the NYSE and NASD, for example, require you to deposit with your brokerage firm a minimum of $2,000 or 100 percent of the purchase price, whichever is less. |
 | | The 25 percent is called the "maintenance requirement." In fact, many brokerage firms have higher maintenance requirements, typically between 30 to 40 percent, and sometimes higher depending on the type of stock purchased. |
 | | Under most margin agreements, even if your firm offers to give you time to increase the equity in your account, it can sell your securities without waiting for you to meet the margin call. |
| www.sec.gov /investor/pubs/margin.htm (1409 words) |
|