What is Reg T?

Reg T is a Federal Reserve Board provision which aims to regulate extensions of credit and requires that an investor has a minimum initial ownership interest of 50%.

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What is a Reg T call?

A Reg T call is issued when a customer doesn’t have enough cash in their brokerage account to cover the 50% requirement.

If you find yourself in a Reg T call, it’s because you haven’t met the initial requirement for the stocks you’ve bought. Initial requirements can vary depending on the specific stocks, but it can never be below 50%. Make sure to check the stock detail page on any stock to find its initial requirement. Robinhood Gold customers who have enabled margin investing are responsible for paying their initial requirement each day.

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Common reasons for receiving a Reg T call:

1. Options assignment: If a customer is assigned and doesn’t have sufficient funds in their brokerage account to cover the 50% requirement for stock purchased, they may receive a Reg T call.

2. ACH reversals: If a deposit you made has been reversed, you may receive a Reg T call due to insufficient funds. {You may need to reinitiate your deposit to immediately cover any trades made.}

Reg T calls are due within four trading days, but Robinhood reserves the right to cover the call early if necessary. We recommend that you resolve your Reg T call immediately.

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Resolving your Reg T Call

To resolve your Reg T call, refer to the app. Below are some common ways to resolve your call:

1. Exercise a long option.

2. Deposit funds equal to your call amount.

3. Close some of your positions by selling shares. The proceeds from the sales will help cover your call.

Please note that liquidating to meet multiple Reg T calls on an account can lead to further restrictions.

Margin involves the risk of greater investment losses. Before using margin, customers must determine whether this type of strategy is right for them given their investment objectives and risk tolerance. For more information please see our Margin Disclosure Statement.

Options trading entails significant risk and is not appropriate for all investors. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Customers should consider their investment objectives and risks carefully before investing in options. Supporting documentation for any claims, if applicable, will be furnished upon request.

Reference No. 20210510-1641729-4916317-2018881
Still have questions? Contact Robinhood Support