Fed Call vs House Call vs Exchange Call

A Fed call, a house call and an exchange call are the three margin calls a stock margin account can receive, and each is a demand to add equity after the account slips below a specific line. The Fed call enforces Regulation T's 50% initial margin on the day you buy; the house call enforces the broker's own maintenance level, usually 30% to 40%, as prices fall; the exchange call enforces FINRA Rule 4210's 25% floor beneath it. One $20,000 position is carried through all three below.

Fed call vs house call vs exchange call: the order they arrive

Equity is the market value of the long positions minus the debit balance (the amount borrowed); each call demands that equity be restored to a required share of market value.

1. Fed call (also Federal call or Reg T call): checked once, on the day of a purchase, against the Federal Reserve's 50% initial requirement.
2. House call: checked continuously against the broker's own maintenance level, typically 30% to 40% of long market value. A falling account hits this line first, since it sits above the regulatory floor.
3. Exchange call (also NYSE call or regulatory call): checked continuously against FINRA Rule 4210's 25% floor, and reached only after the house line has been breached.

What triggers a Fed call?

Regulation T, the Federal Reserve rule governing broker credit, sets initial margin on a marginable stock at 50% of current market value (12 CFR 220.12). A day's transactions are combined, and if equity is less than the required margin, the shortfall is a margin deficiency and the broker must call for it (12 CFR 220.4(c)). A later price drop never creates a Fed call; the maintenance rules take over after the transaction date.

Take the worked example. You deposit $8,000 and buy 200 shares of a listed stock at $100, a $20,000 position. Reg T requires $10,000 of equity, you have $8,000, and the $2,000 gap is a Fed call. It can be met with $2,000 in cash, with $4,000 of fully paid marginable stock (deposited securities count at 50% loan value), with exempted securities such as Treasuries, or with a transfer from the special memorandum account. Say you wire $2,000: the account now holds 200 shares, a $10,000 debit and $10,000 of equity, exactly 50%.

The deadline is in the regulation itself. Section 220.4(c)(3) says a margin call "shall be satisfied within one payment period after the margin deficiency was created or increased", and Section 220.2 defines the payment period as the standard settlement cycle plus two business days: three business days under the T+1 settlement in force since May 2024. If the call is unmet on time, Section 220.4(d) requires the broker to liquidate enough securities to cover it, though a deficiency of $1,000 or less needs no action.

How the special memorandum account changes a Fed call

The special memorandum account, or SMA, is a ledger line recording margin excess the broker has agreed you may use. Section 220.5 credits it with dividends, sale proceeds, cash not required by Reg T (including cash deposited to meet a maintenance call), and margin excess transferred out once equity exceeds 50% of market value. Section 220.4(c)(2) lets a Fed call be met by transfer from the SMA, and brokers draw it down automatically, so a purchase produces a Fed call only when 50% of its value exceeds the SMA balance plus any new cash. The SMA never shrinks when prices fall; it falls only when used, and brokers block its use once equity sits below the maintenance requirement.

What is an exchange call under FINRA Rule 4210?

The exchange call is the regulatory maintenance call. FINRA Rule 4210(c) sets minimum maintenance margin at 25% of the current market value of all margin securities held long. Brokers also call it an "NYSE call", a legacy of NYSE Rule 431.

Back to the example. The debit stays at $10,000 whatever the stock does; every $1 drop in the share price takes $200 off market value and $200 off equity. Equity hits 25% at a share price of $66.67 (market value $13,333, equity $3,333). Suppose the stock closes at $65. Market value is $13,000, equity is $3,000, or 23.1%, and the 25% requirement is $3,250. The exchange call is $250.

Rule 4210(f)(6) governs timing: the margin "shall be obtained as promptly as possible and in any event within 15 business days from the date such deficiency occurred", unless FINRA grants the member more time. That is an outer limit on the firm, not a grace period for the customer; most firms treat a breach of the 25% floor as an immediate liquidation event, since an under-secured customer debit carries regulatory capital charges.

What is a house call?

A house call enforces the broker's own maintenance level; Rule 4210(d) directs every firm to "formulate their own margin requirements" and to review the need for levels above the rule's minimums. The typical base is 30%, with 35% to 40% common; a concentrated, volatile, low-priced or thinly traded position can be marked to 50% or more, up to the 100% that makes it effectively non-marginable.

In the example, a 30% house level is crossed at a share price of $71.43 (market value $14,286), well before the exchange line at $66.67. At the $65 close the house requirement is $3,900 against $3,000 of equity: a $900 house call. One $900 deposit clears both calls, since the house requirement sits above the regulatory one. Meeting either call by selling is expensive: a sale cuts market value and debit equally, leaving equity unchanged, so each dollar sold frees only 30 cents of house requirement (25 cents of exchange requirement). Clearing the $900 house call by liquidation means selling about $3,000 of stock; the $250 exchange call, about $1,000.

SELECT
    call_type,
    requirement_pct,
    round(10000 / (1 - requirement_pct / 100) / 200, 2) AS trigger_price,
    round(10000 / (1 - requirement_pct / 100))          AS market_value_at_trigger,
    round(10000 / (1 - requirement_pct / 100) - 10000)  AS equity_at_trigger
FROM
(
    SELECT 'Fed call (50% initial)' AS call_type, 50 AS requirement_pct
    UNION ALL
    SELECT 'House call (30% maintenance)', 30
    UNION ALL
    SELECT 'Exchange call (25% maintenance)', 25
)
ORDER BY trigger_price DESC

SELECT
    call_type,
    requirement_pct,
    market_value_usd,
    equity_usd,
    required_equity_usd,
    required_equity_usd - equity_usd                                    AS call_usd,
    round((required_equity_usd - equity_usd) / (requirement_pct / 100)) AS sale_to_clear_usd
FROM
(
    SELECT
        call_type,
        requirement_pct,
        200 * 65                                AS market_value_usd,
        200 * 65 - 10000                        AS equity_usd,
        round(200 * 65 * requirement_pct / 100) AS required_equity_usd
    FROM
    (
        SELECT 'House call (30%)' AS call_type, 30 AS requirement_pct
        UNION ALL
        SELECT 'Exchange call (25%)', 25
    )
)
ORDER BY call_usd DESC

House calls carry the shortest deadlines of the three, and the reason is contractual: the house line is the firm's cushion above the regulatory floor, lent from the firm's own money, and the margin agreement, not a regulation, sets its clock. Some firms allow a few business days for a routine house call; most reserve the right to demand same-day payment or liquidate without waiting. Reg T vs portfolio margin covers how portfolio margin replaces these fixed percentages with a stress-tested requirement.

What can the broker do when a call is not met?

More than most customers expect. The margin disclosure statement every margin customer signs (FINRA Rule 2264) lists the powers:

• The firm can force the sale of securities to meet a margin call.
• The firm can sell your securities without contacting you; a phone call first is a courtesy.
• You are not entitled to choose which securities are sold.
• The firm can raise its house requirement at any time without advance written notice.
• You are not entitled to an extension of time on a margin call.

For an unmet Fed call, liquidation is mandatory under Section 220.4(d); for house and exchange calls it is discretionary, and usually fast. Interactive Brokers runs the clearest pre-call practice. It issues no margin calls at all; instead it sends a margin warning, on a best-efforts basis, once equity with loan value is at or below 110% of the maintenance requirement, and its systems liquidate automatically once the requirement itself is breached.

Why futures margin calls are a different mechanism

None of this applies to futures. A futures margin is a performance bond rather than a loan, with no debit balance and no Reg T. Each day the clearinghouse marks every contract to the settlement price and settles the day's gain or loss in cash (variation margin). A futures margin call arises when that daily debit pushes equity below the exchange's maintenance margin; the deposit demanded restores the account to the initial level, typically by the next business day. The mechanics are in how futures margin works.

FAQ

Which comes first, a house call or an exchange call?

The house call. The broker's house level, typically 30% to 40%, sits above FINRA Rule 4210's 25% minimum, so a falling account crosses the house line first and reaches the exchange call only if equity keeps dropping.

How long do you have to meet a Fed call?

One payment period under Regulation T Section 220.4(c)(3): the settlement cycle plus two business days (Section 220.2), or three business days under T+1. An unmet Fed call must be liquidated under Section 220.4(d).

Can a broker sell your stock without telling you?

Yes. The FINRA Rule 2264 disclosure statement says the firm can sell securities in your account without contacting you and that you are not entitled to choose which positions go. Advance notice is a courtesy some firms extend.

Is a day-trading margin call the same as a house call?

No. Day-trading calls were a separate category under FINRA Rule 4210(f)(8), tied to the pattern day trader rule. Amendments effective June 4, 2026, phased in through October 20, 2027, replace them with an intraday margin standard under which deficits are met as promptly as possible and within 15 business days.

Industry-wide margin debt is tracked monthly in FINRA margin debt statistics. To see where a house line would fall for your own debit balance, ask the question in plain English on the Strasmore terminal.