A maintenance call is a demand from your brokerage to deposit more money or securities into your margin account because the value of your holdings has dropped below the required minimum. It’s a specific type of margin call, triggered not when you first buy on margin but afterward, when falling prices erode the equity you have in your account. If you don’t act quickly, your broker can sell your securities without waiting for your permission.
How Margin Accounts Create This Risk
When you buy stocks in a margin account, you put up a portion of the purchase price with your own money and borrow the rest from your broker. That borrowed money is a loan, and the securities in your account serve as collateral. As long as your holdings maintain enough value, everything runs smoothly. But if prices fall, the collateral backing your loan shrinks, and your broker needs assurance that the loan is still covered.
Your “equity” in a margin account is the current market value of your securities minus what you owe the broker. A maintenance call happens when that equity, expressed as a percentage of the total market value, falls below a set threshold.
The Minimum Equity Requirement
FINRA Rule 4210 sets the regulatory floor: you must maintain equity equal to at least 25% of the current market value of the securities in your long margin account. So if you hold $40,000 worth of stock, your equity (market value minus the loan balance) needs to stay at or above $10,000.
That 25% is just the minimum. Most brokerages set their own “house requirements” higher, commonly 30% to 40%, depending on the volatility of the securities you hold. Your broker can also raise these requirements at any time without giving you advance written notice. If you’re holding a concentrated position in a volatile stock, your broker might require 50% or more.
Short positions have their own rules. For stocks trading at $5 or above, the maintenance requirement is $5 per share or 30% of the current market value, whichever is greater. For stocks under $5, it’s $2.50 per share or 100% of market value, whichever is greater.
When a Maintenance Call Gets Triggered
A simple example makes the math concrete. Say you buy $10,000 worth of stock, putting up $5,000 of your own money and borrowing $5,000 from your broker. Your initial equity is 50%. The loan balance stays at $5,000 regardless of what happens to the stock price, so all the risk of price drops falls on your equity.
If the stock drops to $6,667 in market value, your equity is now $6,667 minus the $5,000 loan, which equals $1,667. That’s 25% of $6,667, right at the FINRA minimum. Any further decline triggers a maintenance call. If your broker’s house requirement is 30%, the call would come even sooner, around $7,143.
The key insight: because you’re using leverage, a relatively modest price decline can eat through your equity fast. A 33% drop in the stock in this example wipes your equity down to the bare minimum, even though you originally put up half the purchase price.
How Much Time You Have to Respond
Less than you might expect. A maintenance call is technically due immediately. Some brokers give you two to five days to bring your account back into compliance, but that’s a courtesy, not a right. The standard margin account agreement gives your broker the authority to liquidate securities in your account at its discretion and without prior notice.
Your broker is not even required to notify you before selling. FINRA explicitly states that firms don’t have to issue a margin call before selling securities to meet the maintenance requirement. In fast-moving markets, brokers may automatically sell positions the same day your account falls below the threshold. They can also sell enough securities to pay off your entire margin loan, not just the amount needed to satisfy the call.
Ways to Satisfy a Maintenance Call
You generally have three options to bring your account back into compliance:
- Deposit cash. Transfer enough money into your margin account to raise your equity above the maintenance threshold. This is the most straightforward option but requires having liquid funds available on short notice.
- Deposit additional securities. Transferring fully paid, marginable securities from another account increases the total value of your collateral, which raises your equity percentage.
- Sell holdings. Selling some of the securities in your margin account reduces the amount of margin you’re using. The proceeds go toward paying down the loan, which improves your equity ratio. The downside is you’re locking in losses at a low price.
If you don’t act, or if the market moves too quickly, your broker will choose for you. They’ll sell whatever they need to sell, and they pick which positions to liquidate. You have no say in the selection.
How It Differs From an Initial Margin Call
The term “margin call” covers two distinct situations. An initial margin call happens at the time of purchase. Under Regulation T, you must deposit at least 50% of the purchase price when you buy securities on margin, and you have three business days from the trade date to meet that requirement.
A maintenance call, by contrast, is an ongoing requirement that applies every day you hold positions in a margin account. It can strike weeks or months after your original purchase, whenever a price decline pushes your equity below the maintenance threshold. The timeline to respond is also shorter and less defined, since brokers can act immediately rather than waiting a set number of business days.
What Happens if Your Broker Liquidates
Forced liquidation doesn’t just close out your positions. It can create a taxable event, locking in capital losses or, in some cases, short-term gains on positions you didn’t intend to sell. If the proceeds from selling your securities aren’t enough to cover the full loan balance, you still owe the remaining amount to your broker. A maintenance call can, in extreme cases, leave you owing more than your original investment.
Because brokers aren’t required to contact you before selling, monitoring your account closely matters if you’re using margin. Many brokerages offer alerts that notify you when your equity approaches the maintenance threshold, giving you a chance to act before the broker does.