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What is Regulation T?

This is a Federal Reserve Board regulation that governs Customer cash accounts (non-margin accounts) and the amount of credit that brokerage firms (that's us!) extend to Customers to purchase securities in margin accounts. Regulation T states you can borrow up to 50% of the purchase price of margin eligible securities.

On a side note, some securities you purchase on margin may require you to deposit more than 50% of the purchase price, and not all securities are margin eligible.

Tip: While margin can boost an investment strategy, buying securities on margin is not for everyone. Before investing on margin, please give the Margin Account Agreement the once over to review important risk disclosure information, and see our margin interest rates.