In an equities margin account, maintenance margin refers to the minimum balance of owned equity a trader must maintain. Normally this is set at 25%, though it can vary. Should the balance fall below this level, the investor will face margin calls where they must buy additional equity to reattain the maintenance margin. Depending on market conditions, this can be highly expensive.
Positions bought on margin are leveraged positions where the investor only holds a certain percentage of the overall position. The maintenance margin level is simply the minimum that this is allowed to fall to without triggering a margin call. Traders go to considerable lengths to avoid margin calls, as they can result in forced sales of other holdings, leading to losses.
ADSS offers a range of global markets for traders, with CFD opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.