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What is a Concentrated Maintenance (CM) Call?

Concentrated Maintenance Calls

Concentrated Maintenance calls are issued when you are using more than $500k in margin and you are concentrated in a single stock. Being "concentrated" means you hold at least 70% of your portfolio in that one security. When this happens, the maintenance requirement for the security you're concentrated in increases to 40% (if the underlying ticker has a maintenance ratio less than 40%), though in some circumstances it may be higher.

While your account has a CM call, we’ll prevent you from buying stock to avoid increasing the amount of the call.

You'll need to deposit money or sell stock to return your account to good standing. If you’re unable to deposit or sell stocks by the date your call is due, we may liquidate your positions to cover the call.

Note

We reserve the right to close your positions at any time when you are in a margin call.

We've illustrated a full example below:

A customer ends the day with $650,000 of margin used, and 100% of their portfolio is invested in MEOW. The total market value of their MEOW shares is $1,000,000, so they have portfolio value (minus any cryptocurrency positions) of $350,000. Because MEOW’s margin maintenance requirement is normally 35% but is now 40%, this results in a concentrated maintenance call for an amount of $50,000. The difference of the portfolio value of $350,000 and the maintenance requirement of $400,000.

Here are some tips for meeting your CM call:

Depositing Cash: In the example above, you may deposit $50,000 to cover the call, or sell $50k in Non-Marginable stocks

Selling Marginable Stocks: Marginable stocks have a maintenance requirement of less than 100%, meaning that you won’t get the full dollar value of your sales applied to your CM call. Since these stocks have a maintenance requirement of at least 40%, you will need to take the call amount of $50,000 and divide it by the maintenance requirement of the position you are selling.

Example: If your call amount is $50,000, you need to sell $125,000 of marginable stocks with a maintenance requirement of 40%.

$50,000 / 0.40 = $125,000

Selling Non-Marginable Stocks: Non-marginable stocks have a 100% maintenance requirement. You can sell 1x the call amount because these stocks get 100% release from sales. Example: If your call amount is $50,000, you have to sell at least $50,000 to meet the call.

($50,000/1.00) = $50,000

Disclosures

All investments involve risk and loss of principal is possible. Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation.

For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Securities trading is offered through Robinhood Financial LLC, member SIPC and FINRA. Cryptocurrency trading is offered through Robinhood Crypto, LLC. Robinhood Crypto is not a member of SIPC or FINRA. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC. Robinhood Financial LLC and Robinhood Crypto, LLC are subsidiaries of Robinhood Markets, Inc.

Reference No. 1393483
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