How do I cover a Reg T call?
Depositing funds or securities is the only way to cover a Reg T. The account is restricted from trading (buys) until the Reg T is covered. The Reg T must be met by settlement date: T + 3 for equity trades, or T + 1 for options trades. You must deposit funds equal to the amount of the call, or marginable securities worth two times the amount of the call. If you sell securities to cover the call you will be charged with a “free ride” or liquidation. A free ride is selling the same security that incurred the Reg T, a liquidation is selling a different security. After two violations, the account is restricted for 90 days. For further information on Newedge USA’s margin requirements, click here.
