Regulation T Call

A Regulation T call is a demand from your broker for more cash or securities because your margin account has fallen short of what federal rules require when you buy stock on borrowed money. Margin trading means you're paying for part of a purchase with cash you put up yourself and part with money the broker lends you. Regulation T, a rule from the Federal Reserve Board, sets out how much of the purchase price you must cover with your own funds at the time you buy.

When you place a trade that uses margin, the brokerage checks whether your account has enough equity — the value of what you own minus what you owe — to satisfy that initial requirement. If it doesn't, the account gets flagged, and if it isn't fixed, the broker issues a formal Regulation T call asking you to deposit additional cash or marginable securities within a set window.

The nuance that trips people up is timing and consequence. A "potential" Reg T call is a warning stage, before the official call, meant to give you a chance to add funds, sell something, or otherwise adjust before the brokerage locks in the demand. If an actual Reg T call is issued and not met by the deadline, the brokerage can sell positions in your account on its own, without asking you, to bring the account back into line — this is forced liquidation, and it can happen at a price you wouldn't have chosen.

It's also worth knowing this is separate from a maintenance margin call, which is about keeping enough equity over time as prices move, rather than the up-front requirement at the moment of purchase. The two can look similar from the account holder's side but stem from different rules and triggers.