Margin Call Calculator
Calculate the price at which a margin call will be triggered based on account value, margin loan, and maintenance requirement.
Margin call trigger price is the minimum price at which a leveraged position can fall before your broker requires you to deposit additional funds or liquidate holdings. Understanding this threshold is essential for risk management in margin trading.
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 % — percentage of the total position you funded yourself (Reg T requires 50% minimum in the US)
- Maintenance Margin % — minimum equity percentage required to keep the position open (FINRA minimum: 25%; most brokers require 30–35%)
- Loan Amount — the amount borrowed from the broker = Position Value × (1 − Initial Margin %)
What happens at a margin call:
- Broker issues margin call notice
- You must deposit cash or securities within 2–5 business days (or same day in volatile markets)
- If unmet, broker force-liquidates enough positions to restore required maintenance margin — often at the worst possible time
Worked example: Buy 100 shares of a stock at $80/share. Total position: $8,000. Initial margin: 50% (you put in $4,000; 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
If the stock drops from $80 to $57.14 — a 28.6% decline — you receive a margin call. Your equity at that point = 100 × $57.14 − $4,000 = $5,714 − $4,000 = $1,714, which is exactly 30% of $5,714.
Risk insight: Leverage amplifies losses. A 28.6% stock drop triggers a margin call on a 50% initial margin position — you lose 57% of your own invested capital before the call.