Initial Margin

DEFINITION of 'Initial Margin'

The percentage of the purchase price of securities (that can be purchased on margin) that the investor must pay for with his or her own cash or marginable securities.

Also called the "initital margin requirement."

BREAKING DOWN 'Initial Margin'

According to Regulation T of the Federal Reserve Board, the initial margin is currently 50%. This level is only a minimum and some brokerages require you to deposit more than 50%.

For futures contracts, initial margin requirements are set by the exchange.

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