Federal Reserve Bank of BostonRegulation TFederal Reserve Board Regulation T (also referred to as Reg T) is 12 CFR §220 - Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 220 (Credit by Brokers and Dealers). External links Text of Regulation T ReferencesThe Federal Reserve Bank of ClevelandMargin: Borrowing Money to Pay for Stocks"Margin" is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. But margin exposes investors to the potential for higher losses. Understand How Margin Works Let's say you buy a stock for $50 and the price of the stock rises to $75. The downside to using margin is that if the stock price decreases, substantial losses can mount quickly. In volatile markets, investors who put up an initial margin payment for a stock may, from time to time, be required to provide additional cash if the price of the stock falls. Recognize the Risks Margin accounts can be very risky and they are not suitable for everyone. You can protect yourself by knowing how a margin account works and what happens if the price of the stock purchased on margin declines. Read Your Margin Agreement Know the Margin Rules Before You Trade – Minimum Margin
Federal Reserve Bank of AtlantaFully Paid Securities | IB Knowledge BaseThe term "fully paid securities" refers to securities held in a customer's margin or cash account that have been completely paid for and are not being pledged as collateral to support the purchase of other securities on margin. The term is relevant from a regulatory perspective as the SEC requires that U.S. broker dealers segregate and maintain in a good control location (e.g., DTC or bank) all customer securities which are fully paid. Such securities cannot be pledged or loaned to finance the activities of the firm or other customers. Note that securities which were fully paid at the date of acquisition may later be reclassified as margin or excess margin securities based upon the customer's subsequent trade and/or borrowing activity. See also "excess margin securities".
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