Margin trading

[moxnguyen]

Hi all

For stock leverage trading, in case of the increasing stock price , whether the trader has the right to withdraw a portion of initial margin? if yes, which is the maximum withdraw amount?

Thanks

[S2000magician]

Yes, you can withdraw excess margin.

I do not know whether it’s down to the maintenance margin or down only to the initial margin. My suspicion is that it’s down only to the initial margin; otherwise, everyone would post the initial margin today, then withdraw the money down to the maintenance margin tomorrow.

[not_a_CFA]

this is what the SEC says regarding margin withdrawal.

1. Withdrawal of Margin by the Customer
   The Final Rules provide that a customer may withdraw cash, securities, or other assets deposited as margin for security futures or related positions, provided that the equity in the account after such withdrawal is sufficient to satisfy the required margin for the security futures and related positions in the account under the Final Rules.260
   Customers that use the alternative collateral valuation method for equity securities, pursuant to CFTC Rule 41.46(e) and SEC Rule 404(e), are subject to an additional restriction on withdrawals that parallels the withdrawal restrictions of Regulation T.261Specifically, cash, securities or other assets may not be withdrawn with respect to an account that uses the alternative method if:
   (i) additional cash, securities, or other assets are required to be deposited as margin for a transaction in the account on the same or a previous day pursuant to a special margin requirement; or
   (ii) the withdrawal, together with other transactions, deposits, and withdrawals on the same day, would create or increase a margin deficiency if the margin equity securities were valued at their Regulation T collateral value. 262
   This restriction is intended to prevent a customer from withdrawing margin deposited to satisfy a special margin requirement unless the customer’s equity exceeds the required margin in the account or the customer substitutes securities of equivalent value.

https://www.sec.gov/rules/final/34-46292.htm#II_I
this is from 2002. maybe things have changed a little (in which case there should be a page on the SEC clarifying the changes in regulation)

btw, what is a special margin requirement?