Mark Holstius Elite    Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL  User Profile | I just thought I'd throw in the applicable paragraph from the Finra reg on Maintenance Margin for ETFs that changed in 2009 (reg attached), along with a simple chart I made to help visualize the rules. It gets really complex when you have various differently leveraged ETFs in a margin account, but maybe this will help someone visualize the simple case...??? Do you have something different "down under", John? Mark Strategy-Based Margin Account In general, FINRA is increasing the maintenance margin requirements for leveraged ETFs and associated uncovered options by a factor commensurate with their leverage. In a strategy-based margin account, the current maintenance margin requirement for any long ETF is 25% of the market value, and for any short ETF, the current maintenance margin requirement is generally 30% of the market value.3 Effective December 1, 2009, these maintenance margin requirements will increase by a percentage commensurate with the leverage of the ETF, not to exceed 100% of the value of the ETF, as detailed in the following examples: Long 100 shares ABC ETF@28.00 (200% leverage) Market Value: 2,800 Maintenance Requirement: 2 x .25 = .50 2,800 x .50 = 1,400 Short 100 shares DEF ETF@26.00 (300% leverage) Market Value: 2,600 Maintenance Requirement: 3 x .30 = .90 2,600 x .90 = 2,3404 [Edited by Mark Holstius on 3/25/2016 4:59 PM]  Attached file : Maintenance Margin.jpg (117KB - 881 downloads) Attached file : Finra Reg 09-53.pdf (82KB - 542 downloads) |
