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Strategies & Market Trends : Technical Analysis - Beginners
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To: Claud B who wrote (9013)12/28/1998 1:36:00 AM
From: FR1  Read Replies (1) of 12039
 
Claud - IMHO - You are right with some clarification.

There are two kinds of "maintenance calls". One is forced on the brokerage firm by the feds and the other is at the will of the brokerage firm.

For example, if you fall below 30% it is a federal regulation that the brokerage house must make you bring your account up to at least 30% immediately (within a day or so). If this happens the brokerage firm will notify you that you have X hours to get cash in your account by selling or bringing in actual cash. If no cash is in in X hours, the brokerage firm will sell. X is a real number like 48 hours but I don't know what it is. Also, if you buy stock and do not have cash in your account, you have 72 hours to come up with the cash (fed rule).

The brokerage house, however, also can make its own rules. For example, Dreyfus will give you a maintenance call if your account falls to about 35% because they don't want to wait until you get down to 30%. Houses vary in their degree of toughness.
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