Maintenance margin on short sales of common stock
The basic NYSE/NASD requirement is:
1) for stocks $5.00 and over: 30% of the short position
or $5.00 a share, whichever is higher
2) for stocks less than $5.00 per share: 100% of the short market value
or $2.50 a share, whichever is higher.
Examples:
A. Position = short 1,000 shares @ $50
Short market value = ($50,000)
30% = $15,000
$5.00 per share = $5,000
Therefore, the maintenance requirement is $15,000.
B. Position = short 10,000 shares @ $ 5
Short market value = ($50,000)
30% = $15,000
$5.00 per share = $50,000
Therefore, the maintenance requirement is $50,000
C. Position = short 10,000 shares @ $4.50
Short market value = ($45,000)
100% = $45,000
$2.50 per share = $25,000
Therefore, the maintenance requirement is $45,000
C. Position = short 50,000 shares @ $1.00
Short market value = ($50,000)
100% = $50,000
$2.50 per share = $125,000
Therefore, the maintenance requirement is $125,000 |
