Regulation T 50% Initial Margin Requirement on Stock Purchase
An investor with a new margin account purchases 400 shares of XYZ stock at $50 per share ($20,000 total). Assuming Regulation T is 50%, what is the required initial margin deposit?
Series 7 Margin Accounts Practice Questions & SMA Calculations
Crush long and short margin accounting, Reg T 50% initial requirements, FINRA $2,000 minimum equity rules, Special Memorandum Account (SMA) creation, and maintenance margin calls.
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📋 FINRA Blueprint Weighting Notice:
Margin accounts account for approximately 10 to 14 questions on the Series 7. Candidates must memorize the balance sheet formulas and know exactly what happens to SMA when stock values rise or fall.
Essential Rules & Calculation Shortcuts for Series 7 Margin Accounts
Long Margin Equation
LMV - DR = EQAssets (Long Market Value) minus Loan (Debit Register) equals Customer Equity.
Short Margin Equation
CR - SMV = EQCredit Balance minus Short Market Value equals Customer Equity.
FINRA Minimum Maintenance
Long: 25% of LMV | Short: 30% of SMVFailure to maintain this triggers a maintenance margin call.
Maintenance Call Price Levels
Long: DR ÷ 0.75 | Short: CR ÷ 1.30Quick calculation trick to find the critical market price before a call is issued.
Interactive Calculation Tool
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SMA Calculations & Purchasing Power Guide →
Master the rules of SMA generation, purchasing power, and market drop non-declines.
Practice Question Bank (15 Scored Items)
Click any choice to test your answer with instant feedbackFINRA $2,000 Minimum Initial Equity Requirement
An investor opens a new margin account and places an initial order to buy 100 shares of ABC stock at $30 per share ($3,000 total). Under Regulation T and FINRA rules, what is the required initial cash deposit?
Margin Purchases Below $2,000: 100% Cash Deposit Requirement
An investor opens a margin account and buys 100 shares of a marginable stock at $15 per share ($1,500 total). How much cash must the customer deposit?
Long Margin Account Minimum Maintenance 25% Calculation
A customer has a long margin account with Long Market Value (LMV) of $40,000 and a Debit Balance (DR) of $32,000. Customer equity is currently $8,000. Under FINRA rules, what is the minimum maintenance requirement, and has a maintenance call occurred?
Short Margin Account Minimum Maintenance 30% Calculation
A customer sells short 1,000 shares of stock at $30 per share. The Credit Balance is $45,000 ($30,000 sales proceeds + $15,000 Reg T deposit). If the Short Market Value (SMV) rises to $36,000, what is the customer's equity, and does a maintenance call occur?
Long Margin Maintenance Call Trigger Formula (Debit ÷ 0.75)
An investor has a long margin account with a Debit Balance of $18,000. At what Long Market Value (LMV) will the account receive a minimum maintenance call?
Short Margin Maintenance Call Trigger Formula (Credit ÷ 1.30)
An investor establishes a short position and has a total Credit Balance of $26,000. At what Short Market Value (SMV) will the account receive a minimum maintenance call?
Special Memorandum Account (SMA) Creation on Market Appreciation
A customer opens a margin account and buys 1,000 shares of stock at $40 ($40,000 total), depositing $20,000 cash under Reg T. The market value rises to $50,000. How much SMA is generated by this price increase?
SMA Preservation Principle During Market Downturns
A margin account has an LMV of $60,000, DR of $30,000, and an SMA balance of $8,000. The market value subsequently drops to $45,000. Assuming no customer withdrawals or transactions, what is the NEW SMA balance?
Margin Account Buying Power Calculation (2x SMA)
An investor's margin account shows an SMA balance of $7,000. If Regulation T is 50%, what is the customer's total BUYING POWER for marginable stock?
Cash Withdrawal via SMA: Debit Balance and Equity Impact
An investor has an account with LMV $50,000, DR $20,000, EQ $30,000, and SMA $5,000. If the customer withdraws $3,000 in cash from the account, what are the new DR, EQ, and SMA balances?
Short Sale Margin Rules for Low-Priced Stocks (Under $5/Share)
An investor sells short 1,000 shares of a low-priced stock trading at $2.00 per share ($2,000 total value). Under FINRA Rule 4210, what is the required initial margin deposit?
Pattern Day Trader Definition and $25,000 Minimum Equity Rule
Under FINRA Rule 4210, an investor is designated as a 'pattern day trader' if she executes:
Hypothecation and Broker-Dealer Rehypothecation Limit (140% of DR)
A customer purchases stock on margin with a Long Market Value of $50,000 and a Debit Balance of $20,000. Under SEC Rule 15c2-1, what is the maximum dollar amount of customer securities the broker-dealer can rehypothecate (pledge to a bank) to secure the loan?
Portfolio Margin (Risk-Based) vs. Regulation T Strategy Margin
Compared to traditional Regulation T margin accounting, what is the primary operational advantage of Portfolio Margin for sophisticated options and equity accounts?