Trading Margin Calculator
Calculate margin requirements, buying power, and the exact price where you get margin called.
Inputs
Typically 25% for stocks
How to Calculate Trading Margin Requirements
Margin trading lets you borrow money from your broker to buy more stock than your cash balance allows. This calculator shows your margin requirement, total buying power, and the critical margin call price — the exact level where your broker forces you to sell.
Enter your account size, the stock price, number of shares, initial margin requirement (typically 50%), and maintenance margin (typically 25%). The calculator computes your equity, loan amount, and the price where you get margin called.
Margin amplifies both gains and losses. A 50% initial margin means $50,000 in cash controls $100,000 in stock. A 10% move in your favor is a 20% return on equity. A 10% move against you is a 20% loss — and if you hit the maintenance margin level, your broker liquidates your position automatically.
Formula
Buying Power = Account Size ÷ Initial Margin %. Margin Call Price = Loan Amount ÷ (Shares × (1 − Maintenance Margin %))
Example
Account: $30,000. Initial margin: 50%. You buy 400 shares of META at $500. Total position: $200,000. Your equity: $30,000 (down payment). Loan: $170,000.
Wait — 400 × $500 = $200,000, but 50% margin means you can only control $60,000 worth of stock. Let's fix: you buy 120 shares at $500 = $60,000 position. Equity: $30,000. Loan: $30,000.
Maintenance margin: 25%. Margin call price = $30,000 ÷ (120 × 0.75) = $333.33. If META drops below $333.33, your broker liquidates.
Frequently Asked Questions
What is a margin call and how does it work?
A margin call happens when your account equity falls below the maintenance margin requirement (usually 25% of position value). Your broker will demand you deposit more cash or sell positions immediately. If you don't act fast enough, the broker liquidates your positions automatically — often at the worst possible price.
What is the typical margin requirement for stocks?
Initial margin is typically 50% (you put up half, broker lends half). Maintenance margin is typically 25%. Pattern day traders must maintain a $25,000 minimum balance. Margin requirements vary by broker and can increase during volatile markets.
Is margin trading worth the risk?
For experienced traders with strict risk management, margin can amplify returns. For beginners, margin often amplifies losses and leads to blown accounts. Never use margin without a clear stop loss strategy and position sizing rules.
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Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Trading involves substantial risk of loss. Past performance does not guarantee future results. Always do your own research and consult with a licensed financial advisor before making investment decisions.