Any day I learn something is a good thing....

To be clear, as I understand things the $2.00 threshold is just one criteria....and according to the two individuals I spoke with, its the most common barometer to determining whether a stock can be considered marginable or not, but it is not the only criteria.

Just as an example, someone holding 10,000 shares of RVX, the shares have a value of roughly $30,000 (being conservative).  If the margin rate is 50% and assuming RVX was the only holding in the account, then if RVX qualifies as a marginable security...at 50% there would be about $15,000 showing up as 'buying power'. 

So let's say RVX at one point is considered marginable...and someone sees a news item and the PPS climbing and gets a dose of FOMO....he might just tap into some or all of that $15,000 buying power.  Let's say he buys 2,500 shares at $3.50....he just used up $8,750 of his buying power.  So the account balance is now negative (-$8,750) but that's okay thinks our hypothetical investor, because he still has more room to buy on margin.

Then a week later, for whatever reason, RVX is removed from the list of marginable securities....now checking  his account this investor sees his buying power at -$8,750 and he's faced with a margin call, meaning he either has to fund his account with that amount, that or sell enough shares to cover the short fall.

Where it gets problematic is if RVX suddenly trades lower, say dropping to $3.25....a loss over $600, if it drops to $3 when he sells to cover, then the loss is over $1,200

I'd be interested in the thoughts/experience of others with respect to this.....and please point out any errors I may have made.  I'll share the results of the call when it comes...