Margin Maintenance Requirement (MMR)
The Formal Definition
The statutory minimum percentage of total account value that an investor must maintain as unencumbered equity to avoid an automated margin call or forced liquidation.
Maintenance Equity Threshold = Current Market Value of Securities × MMR Percentage (FINRA Minimum: 25%)
Cole Barrett's Reality Check
The Unvarnished Bottom Line"The initial margin gets you into the trade, but the Maintenance Requirement is what determines if you survive the night. FINRA sets the legal floor at 25%, but brokers can raise their house requirement to 50% or 100% on volatile stocks overnight with no warning, liquidating positions while you sleep."
Interactive Simulator: Test the Math
Real-World Example: Scenario Breakdown
Examining the real numbers for: Holding $40,000 worth of stock with $20,000 borrowed on margin during a sudden market correction
| Execution Metric | Low-Volatility Large Cap (25% FINRA Minimum) | Meme Stock Subject to 75% House Margin Requirement |
|---|---|---|
| Fee / Rate | Standard margin account | Broker elevated house margin requirement |
| Spread / Buffer | Requires $10,000 minimum equity maintenance buffer | Requires $24,000 minimum equity maintenance buffer |
| Execution / Status | Stock dropped 20% (Value: $32,000; Equity: $12,000) | Stock dropped 15% (Value: $34,000; Equity: $14,000) |
| Total Cost / Result | Position survived the market correction intact | Triggered immediate forced liquidation at the bottom |
How Brokers Weaponize This Term
Brokers retain the legal right to raise 'House Maintenance Requirements' from 25% up to 100% at their sole discretion without advance notice, forcing retail liquidations during volatile markets.
Broker Evaluation Matrix
Cole Approves
Interactive Brokers: Real-time risk dashboard displaying exact current and projected maintenance margin requirements before trade entry.
Read Audit →Cole Flags / Avoids
Retail Margin Desks: Frequently raises overnight house maintenance margin requirements on volatile equities without warning.
View Trap Details →Frequently Asked Questions
What is the difference between Initial Margin and Maintenance Margin?
Initial Margin is the equity percentage required to open a new leveraged trade (typically 50% under Reg T); Maintenance Margin is the equity required to keep the trade open.
What happens if your account equity falls below the Maintenance Requirement?
The broker will issue a margin call or immediately liquidate open positions to bring your equity back above the required threshold.