FINRA Rule 4210 sets the margin requirements that every U.S. broker-dealer must enforce on customer accounts trading securities on credit. The baseline: you must keep equity of at least 25% of the market value of long stock positions, 30% for most short positions, and $25,000 in the account if you qualify as a pattern day trader. The rule also lays out a separate portfolio margin framework, reduced requirements for government and investment-grade debt, and authority for brokers to demand extra collateral on concentrated or volatile holdings.1FINRA. FINRA Rule 4210 – Margin Requirements
Maintenance Margin on Long Stock Positions
Rule 4210(c) requires you to maintain equity equal to at least 25% of the current market value of the securities in your margin account. Equity is what the positions are worth minus what you owe the broker. Say you buy $20,000 of stock and borrow $10,000 to do it; your equity starts at $10,000, or 50%. If the position falls to $13,000, the loan stays at $10,000, your equity drops to $3,000, and the account is now at 23%. That triggers a margin call.
The 25% figure is a floor, not a target. Most brokerages set house requirements at 30% to 40%, and volatile or thinly traded names often carry more. Whatever the house rate, no U.S. broker-dealer can go below the 25% regulatory minimum.
The initial deposit when you open a position is governed separately by the Federal Reserve Board’s Regulation T, which allows you to borrow up to 50% of the purchase price for most equity securities.2U.S. Securities and Exchange Commission. Investor Bulletin: Understanding Margin Accounts Rule 4210 fills in the gaps for products Reg T doesn’t cover, like corporate bonds, and takes over once the position is open.3Financial Industry Regulatory Authority. Margin Regulation
Short Sale Margin Requirements
Short positions carry higher maintenance requirements because a short can lose more than its opening value if the stock keeps climbing. Under Rule 4210(c), for any stock priced at $5.00 or above, you must keep equity equal to the greater of 30% of the current market value or $5.00 per share. For stocks trading below $5.00, the requirement is the greater of $2.50 per share or 100% of the market value.1FINRA. FINRA Rule 4210 – Margin Requirements
Bond short positions require the greater of 5% of principal or 30% of market value. These maintenance numbers sit on top of the Regulation T initial requirement, which generally asks for 50% of the sale proceeds when the short is opened.
Pattern Day Trader Rules
Rule 4210(f)(8)(B) classifies you as a pattern day trader if you execute four or more day trades within five business days and those day trades account for more than 6% of your total trades in the margin account over the same period. A day trade is a buy and sell (or short and cover) of the same security in the same day within one margin account.
Once you’re tagged, the account must hold at least $25,000 in equity at all times. Fall below that, and you can close positions but cannot open new day trades until you top the account back up through a deposit or security transfer.
The trade-off for the higher equity floor is more intraday leverage. Pattern day traders can access buying power equal to four times their maintenance margin excess, compared with the standard two times for overnight positions.1FINRA. FINRA Rule 4210 – Margin Requirements
Blowing Through Day-Trading Buying Power
If you exceed the 4x buying power limit, the resulting margin deficiency must be met within five business days. Miss that window and the account is restricted to cash-available trades for 90 days, or until the call is met, whichever comes first. During the restriction you can sell existing positions but cannot open new ones on margin.
The 2026 Repeal of the PDT Framework
On April 14, 2026, the SEC approved FINRA’s proposal SR-FINRA-2025-017 to eliminate the pattern day trader framework and replace it with risk-based intraday margin standards.4U.S. Securities and Exchange Commission. File No. SR-FINRA-2025-017 – Self-Regulatory Organizations The $25,000 minimum equity requirement, the day-trading buying power calculations, and the pattern day trader designation itself will all be removed. FINRA will set the effective date 45 days after publishing its Regulatory Notice, followed by an 18-month phase-in for firms that need time to update systems. The current rules stay in force until the transition completes.
Portfolio Margin as an Alternative
Rule 4210(g) offers a different way to calculate requirements. Instead of applying a flat 25% or 30% to each position, portfolio margin looks at the net risk across your combined holdings — stocks, options, and eligible derivatives — under simulated stress scenarios. A put option that hedges a stock position reduces the requirement because the model sees the offset.
The stress test uses an SEC-approved pricing model that calculates gains and losses at ten evenly spaced points across a range of price moves. The width of the range depends on the product:
- High-capitalization broad-based indices, such as the S&P 500: +6% to -8%
- Non-high-capitalization broad-based indices: plus or minus 10%
- Individual equities and narrow-based indices: plus or minus 15%
The largest theoretical loss from those scenarios becomes the margin requirement. A diversified portfolio of large-cap index products can end up with a much smaller requirement than the same dollar value concentrated in single stocks.
Who Qualifies
To open a portfolio margin account, you must be approved for uncovered short options trading under FINRA Rule 2360, and your broker must give you a written disclosure of the risks before your first trade. No specific exam is required, but you sign an acknowledgment.
Trading unlisted derivatives — over-the-counter equity options, forwards, or non-exchange-traded security-based swaps — requires at least $5 million in account equity, maintained at all times. If the balance falls below that level, the firm must stop accepting new opening orders on the fourth business day unless the orders reduce market risk.
Fixed-income securities can sit in a portfolio margin account but don’t receive portfolio margin treatment; the standard strategy-based rules under Rule 4210 continue to apply to those holdings. Rule 4210 doesn’t dictate a universal minimum equity for portfolio margin accounts overall, but individual firms typically set entry thresholds between $100,000 and $500,000.
When Brokers Must Demand More
The 25% and 30% figures are minimums. Rule 4210(f)(1) requires brokers to demand substantial additional margin whenever securities in an account are subject to unusually rapid price swings, lack an active market on a national exchange, or can’t be liquidated quickly because the position is too large relative to normal trading volume. That’s how a low-float biotech or a thinly traded small-cap ends up carrying a 50%, 75%, or even 100% requirement at some firms.
FINRA also keeps the authority to raise requirements on specific securities or account types when market conditions call for it. For options and market-maker accounts, similar concentration rules apply: if positions represent an undue concentration of risk relative to the firm’s net capital, the broker must require extra margin or hold additional capital against the exposure. Firms have to build procedures for reviewing this on a regular basis, and examiners check for them.
Margin Calls and Deadlines
When equity drops below the required level, the broker issues a margin call. Rule 4210(f)(6) states that the deficiency must be resolved as promptly as possible, and in any event within 15 business days from the date it occurred. That 15-day window is the outer regulatory limit. Most firms give you much less time, and many reserve the right to liquidate without waiting for a deposit.
If you don’t meet the call, the broker will sell enough of your positions to bring the account back to at least the maintenance threshold. Forced liquidations can happen without notice when markets are moving fast, the broker chooses what to sell, and any losses are yours.
Brokers can request extensions from FINRA in limited circumstances, including mark-to-market disputes on covered agency transactions, collateral valuation disagreements, non-U.S. holidays that delay fund transfers, and natural disasters or other abnormal conditions with explicit FINRA staff authorization. Standard strategy-based extension requests must be filed within 15 business days of the deficiency; portfolio margin deficiencies have a tighter three-business-day window.
Securities That Get Different Treatment
Not everything in a margin account is treated as risky equity. U.S. Treasury bills, notes, and bonds carry lower requirements that scale with maturity and type instead of a flat percentage. Municipal bonds and investment-grade corporate debt follow their own formulas tied to maturity and credit quality. A 10-year Treasury simply doesn’t pose the same risk as a speculative stock, and Rule 4210 reflects that.
Cash accounts sit outside the margin framework entirely. If you pay in full for every purchase, there’s no loan and no margin rules to apply. Rule 4210’s requirements only bite when you’re using leverage or selling short. The rule also addresses nonpurpose credit — loans collateralized by securities but used for something other than buying securities. Brokers can extend that credit without standard margin collateral as long as the account is recorded separately and isn’t used to work around margin rules.
Exempt Accounts
Rule 4210(a)(13) creates an “exempt account” category that gets different treatment on certain transactions. It covers other broker-dealers, banks, insurance companies, registered investment companies, pension plans, and state or local government entities. Private entities can qualify with a net worth of at least $45 million and financial assets of at least $40 million, plus one of several additional criteria such as having publicly traded securities or providing audited financials to the broker.
The designation matters most for fixed-income transactions like covered agency transactions — forward-settling trades in mortgage-backed securities guaranteed by government agencies — which have their own margin and mark-to-market requirements under Rule 4210(e)(2)(H). For an individual trader, the exempt account provisions almost never come into play; they’re written for institutional desks.