maintenance margin
A maintenance margin is the minimum amount of equity that an investor must maintain in their margin account after purchasing securities. It acts as a safety net for brokers, ensuring that there is enough collateral to cover potential losses. If the equity in the account falls below this level, the broker may issue a margin call, requiring the investor to deposit more funds or sell some assets.
Typically expressed as a percentage, the maintenance margin varies by brokerage and the type of securities involved. For example, if the maintenance margin is set at 25%, an investor must keep at least 25% of the total value of their investments in equity to avoid a margin call.