A regulated that prevents a bank or firm from liquidating a client's account to cover a margin call, if the amount of the margin call is equal to or less than $500. The five hundred dollar rule is mandated by the Federal Reserve, and is used to keep relatively small financial deficiencies, that could be readily solved, from resulting in the automatic sale of an investment position. This rule was later changed to $1,000.
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Thank you for reading News To Use on April 13, 2011