When is a client considered fully-margined?

When is a client considered fully-margined?

• A. When they do not hold any securities
• B. When their margin requirement is fully met
• C. When all transactions are settled
• D. When they have a positive equity position

Answer: (B)

A client is considered fully-margined when their margin requirement is fully met. This means that they have deposited sufficient funds or securities in their margin account to satisfy the necessary collateral for the borrowed amount used in trading. When a client meets their margin requirement, they can trade using leverage without risking a margin call, as they have enough equity in their account to cover any potential losses from their positions.

In the context of margin trading, being fully-margined is crucial for maintaining positions and allowing the client to engage in further trading activities without the immediate risk of liquidation due to insufficient funds. This concept is central to understanding risk management in brokerage and dealer environments. Other options describe different aspects of a client's trading status but do not specifically address the concept of being fully-margined.