INITIAL MARGIN REQUIREMENTS Clause Samples
The Initial Margin Requirements clause sets out the obligation for parties to provide a specified amount of collateral at the outset of a financial transaction, such as a derivatives contract. This margin acts as a security deposit to cover potential future exposures and is typically calculated based on the risk profile of the transaction or regulatory standards. By requiring an upfront margin, the clause helps mitigate counterparty credit risk and ensures that both parties have a financial stake in the performance of the contract, thereby promoting stability and reducing the likelihood of default.
INITIAL MARGIN REQUIREMENTS. BB&T Securities will not extend credit unless the equity in Your margin account is at least $2,000, or such greater amount as may be required by applicable rules or regulations or by BB&T Securities. The maximum amount which BB&T Securities will loan for equity securities is 50% of the value of marginable securities purchased in Your margin account; different requirements apply to non-equity securities, such as bonds or options. If the market value of stock held as collateral increases after You have met the initial margin requirements, available credit may increase proportionately. Accordingly, if the market value of the stock held as collateral decreases, available credit may be proportionately decreased. Initial margin requirements may change without prior notice. BB&T Securities reserves the right to impose more stringent requirements on positions that involve higher levels of risk. If the market value of a security drops below $2 per share, the security will not be assigned any value as collateral to secure Your margin obligations.
INITIAL MARGIN REQUIREMENTS. The Federal Reserve Board, FINRA and various stock exchanges determine margin loan rules and regulations. Credit will not be extended unless your equity in the securities and other property in your Margin and Short Account is at least $2,000, or such greater amount as may be required by applicable rules or regulations or our house policies. The maximum amount we currently may loan is 50 percent of the value of marginable securities purchased or held in your Margin and Short Account. If the market value of stock held as collateral increases after you have met the initial margin requirement, your available credit may increase proportionately. Initial margin requirements may change without prior notice. We may impose more stringent requirements on positions that involve higher levels of risk; for example, higher limits may apply for thinly traded or volatile securities. All transactions in any of your accounts are to be paid for or required margin deposited no later than 2 p.m. ET on settlement date. You may purchase only certain securities on margin or use them as collateral in your Margin and Short Account, including an AMA. Most stocks traded on national securities exchanges and some over-the- counter securities are marginable. Equity securities with a market value of less than $3 per share may not be purchased on margin or deposited as margin collateral. If the market value of a security drops below $3 per share, the security will not be assigned any value as collateral to secure your margin obligations. Different requirements apply to non-equity securities, such as bonds.