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Investing strategies

You receive a margin call—now what?

Learn about the different types of margin calls and what to do if you get one.
6 minute read

Points to know

  • Federal regulators set the rules for buying on margin.
  • Vanguard Brokerage also has "house maintenance" requirements to maintain a margin account with us.
  • There are 3 types of margin calls, each with different equity requirements.

Rules for margin investing

The Federal Reserve Board (FRB) and Financial Industry Regulatory Authority (FINRA) set industry rules for investing on margin.

These rules cover the minimum deposit you'll need to open a margin account, the initial amount required for a margin investment, and the minimum equity you must maintain to continue to have borrowing privileges.

In addition, Vanguard Brokerage has initial and house maintenance requirements.

If you don't meet the requirements, you'll receive a "margin call"—a demand to increase the equity in your account to cover the call.


Every margin transaction must result in your Vanguard Brokerage Account having equity of at least $2,000.

The 3 types of margin calls

Federal (initial) margin call

You'll get this call when you don't have enough equity to meet the FRB's initial requirement as determined by Regulation T.

The initial requirement is 50% of the total cost of the trade, including commissions, unless the stock is priced under $5. In that case, it's 100%. A federal call is only issued as a result of a trade.

What you should do: You must meet the call by the trade date plus 4 business days.

Maintenance (house) call

You'll get this call when your equity falls below Vanguard Brokerage's house maintenance requirement, which is 35% for most marginable securities.

Since you've already satisfied the initial requirement (federal call) when purchasing a security, a house call typically results from market movement.

Maintenance requirements are based on a stock's current market value, not its purchase price. So you can get a house call if the price declines; on the other hand, a price increase can reduce or eliminate the house call.

For a short position, it's the opposite. You can get a house call if the price increases, while a price decrease can reduce or eliminate the house call.

We issue the house call—usually via an automated message sent to your email address on file—the morning after (known as Day 1) the equity in your account falls below the house minimum.

What you should do: You must meet the call by Day 4.

Exchange (NYSE) call

You'll get this call when your equity falls below the New York Stock Exchange (NYSE) requirement, currently at 25%.

If you get an exchange call, your account probably was already in a house call.

What you should do: It's critical that you cover an exchange call within 2 days.

How to satisfy a margin call

You can satisfy a margin call in 1 of 4 ways:

Sell securities in your margin account. Or buy securities to cover short positions.

Send money to your account by electronic bank transfer, wire, or check by overnight mail.

Sell or exchange Vanguard mutual funds from an account held in your name and use the proceeds to purchase shares of your settlement fund.

Deposit fully paid marginable securities into your margin account, sending endorsed security certificates to Vanguard Brokerage or moving securities from another brokerage account.

While you can choose how you want to meet a margin call, you must meet it by the due date. If you don't, we reserve the right to sell the securities and other property in your account to cover the call—and you won't be able to choose what's sold or liquidated.

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For additional information about margin investing, including the risks involved, read the Vanguard Brokerage Initial Margin Risk Disclosure Statement or visit the FINRA and U.S. Securities and Exchange Commission websites.

All investing is subject to risk, including the possible loss of the money you invest.

Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.

The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.

VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.