DEFINITION of 'Remargining'

Remargining is the process of depositing additional cash or securities into a margin account for the purpose of meeting minimum margin requirements, after an investor has received a margin call because the securities they own have fallen in value.

BREAKING DOWN 'Remargining'

Remargining restores the minimum maintenance margin on a margin account, either by depositing more cash or selling some of the securities in the account.

The maintenance margin percentage varies among brokers, but in the United States, once an investor buys a security on margin, the maintenance margin goes into effect with FINRA requiring that at least 25% of the total market value of the securities be in the account at all times. Still, many brokers can require more as stipulated in the margin agreement. For example, Charles Schwab requires that the equity in an account be at least 30% of the current market value of the security.

However, the initial margin that is required, according to Regulation T is 50%. That is, investors may borrow up to 50% of the purchase price of securities bought using a loan from a broker, with the remaining 50% funded with cash. Investors opening a margin account must also make a deposit of cash or eligible securities totaling at least $2,000 in equity, as collateral for the loan.

  1. Marginable

    Marginable securities trade on margin through a brokerage or ...
  2. Liquidation Margin

    Liquidation margin is the value of all of the equity positions ...
  3. Variation Margin

    A variable margin payment that is made by members to their respective ...
  4. Broker's Call

    A broker's call is the interest rate charged by banks on loans ...
  5. Five Hundred Dollar Rule

    The five hundred dollar rule is a regulation that prevents a ...
  6. House Call

    A house call is a margin call by the brokerage firm for a customer ...
Related Articles
  1. Managing Wealth

    What’s a Good Profit Margin for a New Business?

    Surprisingly, the younger your company is, the better its numbers may look.
  2. Investing

    Finding Your Margin Investment Sweet Spot

    Borrowing to increase profits isn't for the faint of heart, but margin trading can mean big returns.
  3. Personal Finance

    Where to Put Your Cash: Call Deposit vs. Time Deposit Accounts

    Time deposit accounts and call deposit accounts allow customers to earn higher interest in exchange for less access to their cash.
  4. Investing

    How to Trade Futures Contracts

    Futures is short for Futures Contracts, which are contracts between a buyer and seller of an asset who agree to exchange goods and money at a future date, but at a price and quantity determined ...
  5. Insights

    Do Declining Corporate Margins Point To Recession in 2016?

    Learn how declining profit margins have foretold nearly every recession of the past 50 years, and analyze whether they may signal economic contraction in 2016.
  1. What is a margin account?

    A margin account is an account offered by brokerage firms that allows investors to borrow money to buy securities. Read Answer >>
  2. What are the different types of margin calls?

    Learn the differences between margin calls and fed margin calls while reviewing the definitions of each and how to satisfy ... Read Answer >>
  3. What Happens If I Cannot Pay a Margin Call?

    If an investor is unable to meet minimum margin, the broker may liquidate their securities. Read Answer >>
  4. Why is purchasing stocks on margin considered more risky than traditional investing?

    Learn why purchasing stocks on margin is riskier than traditional investing, although it can be more profitable when it is ... Read Answer >>
  5. Profit margin versus operating margin: What's the difference?

    There are some distinctions between profit margin and operating margin. Both measure efficiency of a firm, but one takes ... Read Answer >>
  6. What does a futures contract cost?

    Learn about values of futures contracts and the initial margin a trader must place in an account to open a futures position, ... Read Answer >>
Trading Center