By Non-Marginable Securities: Reg T vs House
Non-marginable securities carry a 100% cash requirement. Here is where that comes from, how Reg T and house rules differ, and how to check a current one.
Non-marginable securities are the positions a broker will not lend against. They carry a 100% requirement: the purchase is paid in full, and the shares supply no collateral to the rest of the account. Two layers decide which securities land there. The federal rulebook sets a floor for what may be margined at all, and the broker's house requirement sits on top of that floor and is usually stricter.
Regulation T sets the floor, the house sets the number
The Federal Reserve writes Regulation T, the rule governing credit a broker may extend on a securities purchase. It does two jobs worth separating. It defines what counts as a margin security at all, keying mostly off where a security is registered and traded, and it sets the initial requirement on those securities at 50% of the purchase price, a figure unchanged since 1974. Anything falling outside the definition is paid for in full.
FINRA Rule 4210 picks up from there with maintenance floors that apply for as long as the position stays open. The familiar one is 25% of market value on a long equity position. Regulation T governs the day of purchase. The FINRA schedule governs every day after it.
Neither number is the one in your account. A broker may set requirements above the regulatory floor, and firms routinely do, name by name and account by account. That third layer is the house requirement, and it is what the platform displays. A security can be entirely eligible under Reg T and still carry 100% at a given firm. The distinction matters most when a reader tries to look up whether something is marginable: the answer lives at the firm, not in the federal rulebook. Our comparison of Reg T margin versus portfolio margin walks through what changes when the whole framework is swapped for a risk-based one.
Which securities are non-marginable?
Four groups cover most of what a retail account runs into:
- Newly listed shares during a broker's initial period, commonly the first month or so of trading.
- Low-priced shares, with the line usually drawn at $5, and securities quoted away from the major exchanges.
- Leveraged and inverse exchange traded funds, which more often carry an elevated house requirement than a flat 100%.
- Concentrated or high-volatility positions, where the requirement scales with how much of one account sits in a single name.
Only the low-priced group has anything like a bright line in the rulebooks, and even there the bright line sits on the short side. The FINRA maintenance schedule names the sub-$5 threshold explicitly for short positions, at the greater of $2.50 per share or 100% of market value. On the long side, the sub-$5 treatment a reader meets is a house rule wearing a regulatory costume.
Why the house line falls near $5
Group every symbol with at least forty sessions on the tape over the past four months by its latest closing price, then measure how far the average one travels in a session. The logic behind the house rule draws itself.
The exact SQL behind every number
SELECT
multiIf(last_close < 1, 'Under $1',
last_close < 3, '$1 to $3',
last_close < 5, '$3 to $5',
last_close < 10, '$5 to $10',
last_close < 50, '$10 to $50',
'$50 and up') AS price_bucket,
count() AS listing_count,
round(avg(avg_range_pct), 2) AS avg_daily_range_pct
FROM
(
SELECT
ticker,
argMax(close, date) AS last_close,
avg(100 * toFloat64(high - low) / toFloat64(close)) AS avg_range_pct
FROM global_markets.stocks_daily_aggs
WHERE date >= today() - 120
AND volume > 0
AND close > 0
GROUP BY ticker
HAVING count() >= 40
)
GROUP BY price_bucket
ORDER BY min(last_close)The cheapest rung, Under $1, holds 729 symbols and averages a 13.84% daily range. The $50 and up rung averages 2.39%. Daily range here is the session high minus the session low, divided by the close: the width of one day's travel, not a return.
That gap is what a lender prices. Half the purchase price is a thin cushion against an instrument whose ordinary session is 13.84% wide, and the cushion has to survive the days when the bid thins out as well. A $5 threshold is a crude stand-in for the width drawn in that chart, and crude is what a firm wants in a rule it applies to thousands of symbols overnight.
New listings and the initial period
A newly public company is the case most readers meet first. Under Regulation T, an equity registered on a national securities exchange qualifies as a margin security from its opening session, so the federal layer clears a new listing on day one. The month-long wait a reader encounters is a house policy, and its length varies by firm. A name being tracked toward IPO lockup expiration can show zero margin value for weeks with nothing in the federal rules requiring it.
Grouping the daily range of recent listings by their age gives the shape a risk desk is looking at.
The exact SQL behind every number
WITH ipo AS
(
SELECT
ticker,
min(listing_date) AS listed
FROM global_markets.stocks_ipos
WHERE listing_date >= today() - 900
AND listing_date <= today() - 120
AND ticker NOT IN ('SPCX')
GROUP BY ticker
)
SELECT
multiIf(age <= 7, 'Days 1 to 7',
age <= 14, 'Days 8 to 14',
age <= 30, 'Days 15 to 30',
age <= 60, 'Days 31 to 60',
'Days 61 to 90') AS days_since_listing,
round(avg(range_pct), 2) AS avg_daily_range_pct,
uniqExact(ticker) AS cohort_size
FROM
(
SELECT
a.ticker AS ticker,
dateDiff('day', i.listed, a.date) AS age,
100 * toFloat64(a.high - a.low) / toFloat64(a.close) AS range_pct
FROM global_markets.stocks_daily_aggs AS a
INNER JOIN ipo AS i ON i.ticker = a.ticker
WHERE a.date >= today() - 1000
AND a.volume > 0
AND a.close > 0
)
WHERE age >= 0
AND age <= 90
GROUP BY days_since_listing
ORDER BY min(age)Across the 602 listings in the first bucket, the opening week averages a 14.52% daily range. By Days 61 to 90 the same cohort averages 8.29%. Set either figure beside the top rung of the price ladder above.
Age is only half of it. Tradable supply matters too: a listing whose stock float is a thin slice of shares outstanding can move hard on modest volume, and house requirements on those names often stay elevated well past the first month, through lockup expiry and the supply arriving with it.
The line moves under you
A margin requirement is a number the broker maintains and revises. The population sitting on the wrong side of the $5 line turns over every month.
The exact SQL behind every number
SELECT
formatDateTime(m, '%Y-%m') AS month,
countIf(month_close < 5) AS under_5_count,
countIf(month_close < 1) AS under_1_count
FROM
(
SELECT
toStartOfMonth(date) AS m,
ticker,
argMax(close, date) AS month_close
FROM global_markets.stocks_daily_aggs
WHERE date >= toStartOfMonth(today() - 730)
AND date < toStartOfMonth(today())
AND volume > 0
AND close > 0
GROUP BY m, ticker
)
GROUP BY m
ORDER BY mThe most recent full month on the panel counts 2281 symbols closing below $5, 968 of them below $1. The first month in the window counted 1869. Names cross that line in both directions continuously, and a house list is rebuilt against the tape rather than published on a schedule.
What a 100% requirement does to an account
Two effects, and they work differently.
The first is buying power. A $10,000 purchase at a 50% requirement uses $5,000 of cash and borrows the balance. The same purchase at 100% uses the full $10,000. Buying power falls dollar for dollar with the trade, and the position hands nothing back.
The second is collateral. Loan value is the amount a broker will lend against a holding. At a 100% requirement, loan value is zero. The shares still sit in the account and still count in total equity, and they no longer back any borrowing. When a firm moves a name already held to 100%, the collateral that position was contributing goes to zero while the loan balance stays exactly where it was. An account can then face a maintenance call on positions its owner never touched. The cures are the ordinary ones: add cash, or sell something.
Option sellers meet the same layering from the other direction, where the house number typically sits well above the exchange minimum. Our note on margin for selling naked options works through that arithmetic.
How to look up the current requirement
Any list of non-marginable names is a snapshot with a short shelf life, which is why this page carries none. Four durable places to look:
- The margin requirement field on the symbol page inside your own brokerage platform. That is the number applied to your account today.
- The firm's margin disclosure statement and house requirement schedule, published on its site and revised without individual notice.
- The margin agreement on file, which reserves the firm's right to change requirements at any time, including on positions already held.
- FINRA Rule 4210 for the maintenance floors, and Regulation T for the federal definition and the 50% initial number.
Aggregate borrowing across FINRA member firms is reported monthly and gives the industry-level view: see FINRA margin debt statistics.
FAQ
What does non-marginable mean?
A non-marginable security carries a 100% requirement at the broker. The buyer pays the full price in cash, the position has no loan value, and it cannot serve as collateral for borrowing elsewhere in the account.
Are IPO shares marginable?
Under Regulation T, shares registered on a national securities exchange qualify as margin securities from the first session. Most brokers apply a house requirement of 100% for an initial period anyway, commonly around a month, and the length differs from firm to firm.
Why are stocks under $5 usually non-marginable?
On the long side the $5 line is a house convention rather than a federal one. The FINRA schedule names the threshold explicitly for short positions, at the greater of $2.50 per share or 100% of market value. Sub-$5 names also travel much wider daily ranges, as the price ladder above shows.
Can a broker raise a margin requirement without notice?
Yes. Margin agreements reserve the right to change house requirements at any time, including on positions already open, and firms exercise it around earnings dates and volatility events.
Does a non-marginable position count toward a margin call?
Its market value counts in account equity, and its loan value is zero. It cannot supply collateral against a loan balance, which is how a 100% requirement on one holding can produce a maintenance call sitting on the rest of the account.
Every panel here ships with the exact SQL beneath it. Open one, move the price line from $5 to whatever your own firm uses, and rerun it on the Strasmore terminal.