Sma stock margin
A special memorandum account (SMA) is a line of credit that an investor in U.S. equities can use to buy more shares on margin. The credit is created when the market value of securities in the investor’s margin account increases in value. The Special Memorandum Account (SMA), is a line of credit that is created when the market value of securities held in a Regulation T margin account appreciate. The objective of this account is to maintain the buying power that unrealized gains create towards future purchases without creating unnecessary funding transactions. Margin liquidation example – Justin: Intraday buying power = $100,000. Today, Justin buys $100,000 of ABC stock. He reviews his margin account balances and understands that he is very close to being in an exchange call, but is not overly concerned because he is planning on selling the stock before the market closes today.