Margin Requirements
Newedge USA, LLC margin rules:
- The minimum account equity is $5,000 to be considered for margin.
- Accounts must maintain at least $2,000 in equity to maintain a margin account.
- IPO's (less than 30 days) and stocks trading under $5.00 are not marginable.
Margin maintenance requirements:
| Stocks and Options |
| Stocks |
| Position |
Initial Requirement |
Maintenance Requirement |
| Long Stocks |
50% of Cost |
Stocks above $14
Stocks between $5 and $14
Stocks below $5 |
30% of position value
$4.00 per share
100% of Current Market Value |
| | Sale Proceeds plus |
| Short Stocks |
Sale Proceeds plus 50% of Cost |
Stocks above $14
Stocks between $5 and $14
Stocks below $5 |
30% of position value
$4.00 per share
May not be sold short |
| *Concentrated positions may be held to minimum maintenance requirements of 50% or greater. |
| Options |
| Position |
Initial Requirement |
Maintenance Requirement |
| Long Calls or Long Puts |
100% of Cost |
100% of Current Market Value |
| Short Uncovered Equity Calls |
Proceeds received plus the greater of 20% of the underlying stock less out-of-the money or 10% of the underlying stock. |
Same as Initial Requirement |
| Short Uncovered Equity Puts |
Proceeds received plus the greater of 20% of the underlying stock less out-of-the money or 10% of the aggregate exercise price of the put. |
Same as Initial Requirement |
| Short Uncovered Index Calls |
Proceeds received plus the greater of 15% of the underlying index less out-of-the money or 10% of the underlying index. |
Same as Initial Requirement |
| Short Uncovered Index Puts |
Proceeds received plus the greater of 15% of the underlying index less out-of-the money or 10% of the aggregate exercise price of the put. |
Same as Initial Requirement |
| Debit Spreads |
100% of Cost |
100% of Current Market Value |
| Credit Spreads |
100% of Strike Difference less net credit received from option premium. |
100% of Strike Difference less net credit of option market value. |
| Short Straddles and Strangles |
The greater of the short put or short call requirement, plus the proceeds received on the other side. |
Same as Initial Requirement |
| Long ButterflyCall or Put |
100% of Cost |
100% of Current Market Value |
| Short ButterflyCall |
100% of the strike difference of the two lower strikes |
Same as Initial Requirement |
| Short ButterflyPut |
100% of the strike difference of the two higher strikes |
Same as Initial Requirement |
| Stocks and Options |
| Covered Calls |
50% requirement on the long underlying stock. No requirement on the short call. |
30% of Current Market Value of the Stock. No requirement on the short call. |
Long Stock / Long Put |
50% Requirement on the long underlying stock. 100% of the put purchase price. |
0 % of Current Market Value for the long put. Maintenance on long stock is the lower of: |
| 1. 10% of the put exercise price plus 100% of any out-of-the-money amount. |
| 2. 30% of the Current Market Value of the Stock |
| Short Stock/ Long Call |
Sale proceeds plus 50% requirement on the short underlying stock. 100% of the call purchase price. |
100% of Current Market Value for long calls. Maintenance on short stock is the lower of: |
| 1. 10% of the put exercise price plus 100% of any out-of-the-money amount. |
| 2. The maintenance requirement on the stock. |
| Short Stock/ Short Put |
None required on short put. Short sale proceeds, plus 50% on short stock. |
None required on short put. Short sale proceeds, plus 30% of position value on short stock. |
| Conversion |
100% of the long put purchase price. 50% requirement on the long stock position. No requirement on the short call. |
10% of the exercise price. |
| Reverse Conversion |
100% of the long call purchase price. Sale proceeds plus 50% requirement on the short stock position. No requirement on the short put. |
10% of the exercise price. |
Click here for Futures Margin Information.
Click here for Margin Disclosure.
Click here for Day Trading Margin Rules.
Click here for Day Trading Margin Disclosure.
Click here for Truth in Lending Statement.
Options
At Newedge USA, LLC, each application for option trading is treated individually based primarily on the customer's trading experience, including options, and financial condition.
Spreads
Accounts must:
- Have a minimum equity of $5,000 in order to be initially approved for options spread trading.
- Always have at least $5,000 in equity in order to open new spread positions.
- Always meet margin requirements.
Uncovered Options
Selling uncovered options may subject an investor to significant portfolio risk and unlimited loss potential. Only investors with significant option trading experience are approved to conduct naked option writing.
Naked option approval is considered after the account has been funded with $65,000.00.
Please note that options are not suitable for all investors and investing in options carries substantial risk. Because of the importance of tax considerations to all options transactions, investors considering options should consult with a tax advisor as to how taxes affect the outcome of contemplated options transactions. Individuals should not enter into options transactions until they have read and understood the risk disclosure document titled "Characteristics and Risks of Standardized Options." To obtain a copy of the Options Disclosure Document contact us at 888-889-9178. Member NYSE, SIPC, MSRB and other principal exchanges.
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