Definition
Regulation T is the Federal Reserve rule governing the extension of credit by brokers. It sets the initial margin requirement at 50%, meaning you must deposit at least half the purchase price when buying stocks on margin. After purchase, maintenance margin (typically 25-30%) applies to ongoing positions.
Formula
Initial Deposit Required = Purchase Price × 50%
Example
To buy $10,000 of stock on margin, Reg T requires you deposit at least $5,000 (50% initial margin).
FAQ
What is Reg T Margin?
Federal Reserve regulation setting initial margin requirements.
How do you calculate Reg T Margin?
A common formula for Reg T Margin is: Initial Deposit Required = Purchase Price × 50%
Why is Reg T Margin important?
Reg T Margin helps investors evaluate trading mechanics and make more informed decisions.