Credit (Risk) Analyst Question:

A security is marginable if it can be traded on margin through a brokerage or other financial institution. Securities with high liquidity and market capitalization are more likely to be marginable. Other securities, such as stocks priced below $5/share, are not marginable.

The rules governing which securities are marginable and which are not are set out in Regulation T and Regulation U of the Federal Reserve. Self-regulatory organizations such as the NYSE and FINRA​ are also involved in the regulatory process. Although individual brokers can adopt their own requirements, they must be at least as strict as those prescribed by law.