Margin calculator
Margin lets you buy more stock than your cash covers, and it amplifies losses as much as gains. This calculator shows the loan you would carry, what it costs and how far the stock can fall before your broker calls for more money.
Margin call price
$71.43
A 28.57% fall from here
- Cash required
- $5,000.00
- $10,000.00 position
- Loan from the broker
- $5,000.00
- 2x leverage
- Interest cost
- $45.83
- Profit after interest
- +$954.17
- Return on your cash
- +19.08%
- +10% without margin
For education only, not investment advice. Results are estimates based on what you enter, and they leave out anything not shown, such as slippage and most taxes. Check the numbers with your broker or a licensed professional before acting on them.
The formula
- Cash required
- shares x price x initial margin %
- Loan
- position value - cash required
- Margin call price
- loan / (shares x (1 - maintenance margin %))
- Interest
- loan x annual rate x days held / 360
Worked example
You buy 100 shares at $100 with 50% initial margin. Your broker's maintenance requirement is 30% and it charges 11% a year. You hold for 30 days and sell at $110.
- Cash required: $10,000 x 50% = $5,000.00
- Loan: $10,000 - $5,000.00 = $5,000.00
- Margin call price: $5,000.00 / (100 x 70%) = $71.43
- Interest: $5,000.00 x 11% x 30 / 360 = $45.83
A 28.57% fall to $71.43 triggers a margin call. Selling at $110 instead makes $954.17 after interest, or 19.08% on your cash, against 10% without margin. A 10% fall works the same way in reverse, costing about 20% of your cash plus the interest.
The rules behind the numbers
In the US, Regulation T lets you borrow up to 50% of the purchase price of a marginable stock, and FINRA requires equity of at least 25% of the position's value while you hold it. Those are minimums. Brokers can and often do require more, particularly on volatile or low-priced stocks, and they can raise requirements without warning.
A margin call is a demand to add cash or securities. Your broker is generally not required to wait for you, and it can sell your shares without notice to bring the account back into line. That sale can happen at the worst moment, such as during a sharp fall.
What this model leaves out
The calculation looks at one long position on its own. A real margin account pools everything you hold, so a fall in another stock can trigger a call too. Interest also accrues on a balance that changes and usually posts monthly. Short positions follow different requirements and are not covered here.
Frequently asked questions
What is a margin call price?
It is the share price where your equity falls to the maintenance requirement. Your equity is the position's value minus the loan, so it shrinks faster in percentage terms than the stock itself falls.
How much margin can I use?
Under Regulation T, generally up to 50% of the purchase price of an eligible stock, which is 2x leverage. Some stocks, including many low-priced ones, can't be bought on margin at all, and each broker sets its own limits.
Can I lose more than I invested on margin?
Yes. If a stock falls far enough, for example on a large overnight gap, selling the shares may not repay the loan. You would still owe the broker the difference.
Why divide interest by 360?
Many US brokers calculate margin interest on a 360-day year. Your broker's agreement states the exact method, and the difference from 365 days is small over short periods.