Margin lending allows you the flexibility to use your existing investment portfolio as collateral to purchase additional investments, sell securities short or as temporary coverage for funds due by settlement date, but not yet paid. Margin is not available for all account types such as IRA's and custodial accounts.
While the primary goal for most investors is borrowing to buy additional securities, you can also use these funds as a lending alternative for other purposes to be used at your discretion such as home improvements, education expenses or auto financing.
CONSIDER BORROWING ON MARGIN IF YOU:
- Have a substantial and diversified portfolio and secure disposable income
- Are a disciplined investor and are willing to bear greater risk in return for greater return
- Understand that borrowing on margin can multiply losses as well as gains
- Want to save substantial interest expense while gaining access to funds
- Understand the Margin Guidelines and Margin Risks
Base Rate -2%
Base Rate -3%
Open a Margin Account
If you already have a Regal account and are considering using margin, you must have sufficient buying power and eligible securities in your account as well as a completed Margin Account Agreement on file. Once a margin agreement is on file, you essentially are pre-approved to use your credit-line whenever you choose. By setting up a margin account, you have no obligation to borrow. Margin borrowing can be accessed at your convenience. Call 1-800-92-REGAL to determine the dollar value you can borrow against your investments as collateral.
Benefits of Margin
By setting up a margin account, you have no obligation to borrow. Margin borrowing is accessible at your convenience once your margin account is approved. To access, simply place a trade or for added flexibility, withdraw funds using an Regal Visa® debit card or check (enrollment in cash management services required). If borrowing for short-term cash purposes, in most cases you can receive funds the following business day after your initial request.
If the securities in your account decline in value, so does the value of the collateral supporting your loan, which could result in a margin call and/or selling securities in your account(s). It is important that you fully understand the risks involved in trading securities on margin. Click here for the risks involved with trading securities in a margin account. If you are considering the use of margin, you must fully understand the risks associated with using a margin account.
Regulations dictate the amount of cash or equity that must be deposited and maintained as collateral against your margin loan. The amount you can borrow on margin toward the purchase of securities or for personal use is typically limited to 50% of the value of marginable securities in your account. However, the market price of the security must generally be above $3.00 per share and may not be a pink sheet or bulletin board stock.
Your buying power and cash available may fluctuate with the value of your securities from day to day. Margin is available, subject to approval, on most brokerage accounts with the exception of IRAs and Custodial accounts.
Minimum Equity Requirements to Use Margin
Minimum Equity Requirements to Trade Certain Option Strategies
Marginable Option Transactions
Option Expirations Policy
Day Trade Buying Power Calculation
Margin Account Maintenance and Initial Requirements
Short Stock Transactions
Leveraged Long ETF Transactions
Leveraged Short ETF Transactions
Concentrated positions on margin will hold the following requirements:
- Required Market Price for Stocks:Most stocks traded on major U.S. exchanges and Nasdaq-listed securities priced $3.00 and above are eligible for margin borrowing. Please note that some stocks including Pink Sheets or Bulletin Board Stocks are not eligible for margin borrowing.
- Minimum Market Price for Stocks: Stocks priced under $3.00 are not eligible for credit towards margin requirements and are not credited to margin buying power.
- Mutual Funds: Most mutual funds can be used as collateral, provided they've been held for at least 30 days Please note you cannot purchase mutual funds on margin.
- Bonds: Most corporate, treasury, municipal, and government agency bonds are eligible for margin borrowing. Margin ability and margin requirements are subject without advance written notice to change based on liquidity, bond ratings, concentrations, and other risk factors.
- Money market funds, certificates of deposit (CDs), annuities, and options are not available as collateral for margin borrowing.
- Maintenance Calls: Maintenance calls are due in four (4) business days under normal conditions. Exchange calls are due in one business day.
- House Required Minimums: If equity drops below house required minimum, or a call is issued for any other reason, you may be required to immediately sell securities or deposit additional funds promptly.
- Concentrated Accounts: Margin maintenance is higher for concentrated accounts and requirements may vary per security.
- Margin Maintenance: Margin maintenance ranges from 30% - 100% depending on the particular securities in an account.
- Increased Maintenance Requirements: From time-to-time, we may be required by our clearing firm to increase maintenance requirements due to overall firm concentration, or unusual market conditions. We further reserve the right to increase the requirements at our sole discretion.
European Style Option Spreads
Covered LEAPS Requirements
Initial Requirement: Proceeds from the sell of the LEAPS calls cannot be used to satisfy Reg-T requirements. If an account purchases stock and sells short covered LEAPS calls, the account will be required to meet the 50% initial requirement on the long stock.
Maintenance Requirement: The short market value of the LEAPS will be deducted from the equity when figuring maintenance requirements for accounts holding these positions. The value of the long stock will be valued at the price of the stock or the strike price of the option, whichever is greater.