Maintenance Margin

The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and NASD, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account. Keep in mind that this level is a minimum, and many brokerages have higher maintenance requirements of 30-40%.

Also referred to as "minimum maintenance" or "maintenance requirement".

Investopedia Says:
As governed by the Federal Reserve's Regulation T, when a trader buys on margin, key levels must be maintained throughout the life of the trade. First off, a broker cannot extend any credit to accounts with less than $2,000 in cash (or securities). Second, the initial margin of 50% is required for a trade to be entered. Finally, the maintenance margin says that an equity level of at least 25% must be maintained. The investor will be hit with a margin call if the value of securities falls below the maintenance margin.

Related Links:
Find out what margin is, how margin calls work, the advantages of leverage and why using margin can be risky. Margin Trading

Equity level that must be maintained in brokerage customers' margin accounts, as required by the New York Stock Exchange (NYSE), the National Association of Securities Dealers (NASD), and individual brokerage firms. Under Regulation T, $2000 in cash or securities must be deposited with a broker before any credit can be extended; then an Initial Margin requirement must be met, currently 50% of the market value of eligible securities long or short in customers' accounts. The NYSE and NASD, going a step further, both require that a margin be maintained equal to 25% of the market value of securities in margin accounts. Brokerage firm requirements are typically a more conservative 30%. When the market value of margined securities falls below these minimums a Margin Call goes out requesting additional equity. If the customer fails to comply, the broker may sell the margined stock and close the customer out. See also Margin Requirement; Margin Security; Mark to the Market; Sell Out.

1. In futures, money that a customer must keep in a Margin account when a position is outstanding. It is usually lower than the initial margin posted. The value of positions are posted to market daily. If position losses exceed the maintenance margin, the dealer issues a margin call requiring the customer to post additional margin.

2. In securities, the margin requirement a brokerage customer must maintain at all times in a brokerage account with a debit balance. Federal Reserve Regulation T, which regulates broker-dealers, requires an initial $2,000 deposit in a brokerage account and sets the margin requirement (50% since 1974) to cover margin trading on a customer's account.