The margin call calculator shows the stock price at which your broker would issue a margin call. Understanding your margin call trigger price helps you manage risk and set appropriate stop-loss levels before losses force a margin call.
How Margin Calls Work
A margin call is triggered when your account equity falls below the maintenance margin requirement. The formula: Margin Call Price = Loan ÷ (Shares × (1 − Maintenance %)). With a $5,000 loan on 100 shares and 30% maintenance: $5,000 ÷ (100 × 0.70) = $71.43.
What Happens During a Margin Call
Your broker notifies you (margin call notice) and you typically have 2-5 business days to deposit additional funds or sell securities. If you don't respond, your broker can force-sell your securities — often at unfavorable prices. Some brokers liquidate without notice during extreme market moves.
FAQ
What is a margin call?
A margin call occurs when your account equity falls below the broker's maintenance margin requirement. Your broker will require you to deposit additional funds or sell securities to bring your equity back above the requirement. Failure to meet a margin call can result in forced liquidation.
What is the typical maintenance margin requirement?
FINRA sets a minimum maintenance margin of 25% for most securities. However, most brokers set higher requirements: 30-40% for many stocks, and higher still for volatile stocks or concentrated positions. Options on margin have different requirements.
How is the margin call price calculated?
Margin call price = Loan Amount ÷ (Shares × (1 − Maintenance Margin %)). For example: $5,000 loan on 100 shares with 30% maintenance: $5,000 ÷ (100 × 0.70) = $71.43. If the stock falls below $71.43, you'd receive a margin call.
How can I avoid a margin call?
Keep a significant buffer above the maintenance requirement (20%+ extra). Avoid concentrating margin in volatile stocks. Set personal stop-loss rules before reaching the margin call level. Consider reducing margin use during volatile markets.