It is an initial deposit of collateral or cash needed to enter in a trade. The current initial margin requirements is 50% set by the Federal Reserve Board Regulation. This is the minimum requirements regulations but usually equity brokerage firms set initial margin higher than 50%. In order to open a margin account with brokerage firm, account container must needed to deposit certain volume of cash, collateral or security, known as initial margin requirement. A margin account arouse the traders, market participants and investors to use leverage and purchase specific security with a full value that is larger than existing cash balance in account.
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