Margin Call Calculator

The margin call trigger price is how far a leveraged position can fall before your broker demands more cash or starts selling your holdings for you.

Margin call trigger price formula: Trigger Price = Purchase Price × (1 − Initial Margin %) ÷ (1 − Maintenance Margin %)

Alternative formula using account equity: Trigger Price = Loan Amount ÷ (Number of Shares × (1 − Maintenance Margin %))

Where:

• Purchase Price: price per share at which the position was opened
• Initial Margin %: the share of the position you funded yourself. Regulation T (Reg T), the Federal Reserve rule governing broker credit, requires at least 50% in the US
• Maintenance Margin %: the minimum equity percentage needed to keep the position open. The Financial Industry Regulatory Authority (FINRA) floor is 25%, and most brokers set 30 to 35%
• Loan Amount: what you borrowed from the broker, equal to Position Value × (1 − Initial Margin %)

What happens at a margin call:

1. The broker issues the notice
2. You deposit cash or securities, usually within 2 to 5 business days, and sometimes the same day when markets are moving
3. If you do not, the broker sells enough of your positions to restore the requirement. You do not choose which ones, and it happens at the bottom, because that is when calls are issued

Worked example: Buy 100 shares at $80. Total position $8,000. Initial margin 50%, so you put in $4,000 and the broker lends $4,000. Maintenance margin 30%.

• Loan amount = $4,000
• Trigger price = $4,000 ÷ (100 × (1 − 0.30)) = $4,000 ÷ 70 = $57.14 per share

A drop from $80 to $57.14 is a 28.6% decline, and that is where the call lands. Your equity there is 100 × $57.14 − $4,000 = $1,714, which is exactly 30% of the $5,714 the position is then worth.

The part people miss: that 28.6% slide in the stock has cost you 57% of your own money, because the loan does not shrink when the price does. Leverage cuts both ways and the maintenance requirement is the point where the broker stops sharing the risk with you.

A note on brokers changing the rules: house maintenance requirements are not fixed. A broker can raise the requirement on a single volatile ticker to 50%, 75%, or 100% overnight, which triggers calls on accounts that were comfortably above the line the day before. This is common around earnings and on heavily shorted names.