Margin Call Calculator

How the margin call price is calculated

For a long position bought on margin, three formulas do all the work. Equity is what you'd keep if you sold and repaid the loan; the maintenance requirement is the minimum equity your broker allows:

Equity            = shares × price − loan
Equity %          = equity ÷ (shares × price)
Margin call price = loan ÷ ( shares × (1 − maintenance %) )

Using the example above — a $2,500 loan on 100 shares at a 25% maintenance requirement — the call price is $2,500 ÷ (100 × 0.75) = $33.33. The bigger your loan or the higher the maintenance requirement, the higher that price sits, and the smaller your cushion. The calculator above solves this for your position and shows how far today's price is above the line.

Maintenance margin vs initial margin: the difference that causes calls

These are two different rules. Initial margin — set by the Federal Reserve's Regulation T at 50% for most stocks — is how much of a purchase you must fund yourself at the moment you buy. Maintenance margin is the minimum equity you must keep afterward, with a FINRA minimum of 25%. You clear the initial requirement once, at purchase; the maintenance requirement applies every day you hold. Margin calls come from the maintenance rule — your equity drifting below that ongoing minimum as the price falls.

What happens if you don't meet a margin call

If you don't bring the account back to the maintenance level, your broker can sell securities in your account to cover the shortfall. A few facts worth knowing plainly: the broker chooses which positions to sell, it is not required to notify you first, and in fast-moving markets it can liquidate immediately. If the sale doesn't fully repay the loan, you still owe the remaining balance. And in a taxable account a forced sale is a realized gain or loss — estimate it with our capital gains tax calculator so a liquidation doesn't surprise you at tax time.

How to cure a margin call: deposit cash, deposit securities, or sell

You generally have three ways to satisfy a call, each with a trade-off:

• Deposit cash. The most direct fix — it pays down the loan and lifts your equity immediately, but it ties up cash you may want elsewhere.
• Deposit marginable securities. Transferring in other eligible shares raises your equity without selling, though those securities then carry their own margin exposure.
• Sell positions. Selling reduces the loan and the position at once, but it locks in losses at a low price and, in a taxable account, creates a taxable event.

The calculator shows both the cash to deposit and the number of shares to sell to reach the maintenance level, so you can compare the two.

Why brokers set maintenance requirements above the 25% FINRA minimum

The 25% figure is a floor, not a target. Brokers set higher house requirements — often 30% to 40% — to give themselves a buffer against a position falling faster than they can liquidate it. A higher house requirement means a call is triggered sooner (at a higher price), which protects the broker from being left with an unrecoverable loan. It also means your usable cushion is smaller than the 25% minimum alone would suggest, which is why the calculator lets you set the exact percentage your broker uses.

House requirements on volatile and low-priced stocks

Requirements aren't uniform across tickers. For volatile names, recent IPOs, heavily shorted stocks, or low-priced shares, a broker may impose a special house requirement of 50%, 75%, or even 100% — meaning little or no borrowing is allowed against that position. The logic is the same: the more sharply a stock can gap, the more equity the broker wants held against it. Note that a stock split or reverse split changes the share price and can move a stock into or out of a broker's low-priced tier, which may change its requirement.

Margin call price on a short position

On a short sale the math inverts: you lose money as the price rises, so the call comes from above, not below. Your account holds the sale proceeds plus your posted margin as a credit balance, and a call triggers when equity falls below the maintenance percentage of the short's market value:

Short call price ≈ credit balance ÷ ( shares × (1 + maintenance %) )

Shorting 100 shares at $50 with 50% initial margin gives a $7,500 credit balance; at a 30% maintenance requirement the call price is about $7,500 ÷ (100 × 1.30) ≈ $57.69. Because a short's losses are theoretically unlimited, the cushion can vanish quickly. The calculator above models long positions.

Margin calls during fast markets and gap-downs

A margin call price assumes the stock trades down to it in an orderly way. In a gap-down — an earnings miss, a halt, an overnight drop — the price can open well below your call price, so the account is already deep in a call before you can act, and the broker may liquidate at whatever price the market offers. Deep drops are also disproportionately hard to recover from; our recovery calculator shows why a 40% loss needs a 67% gain to break even, and the leveraged ETF decay calculator shows how leverage magnifies that path.

Margin interest: the ongoing cost most people forget to model

A margin loan accrues interest daily and is added to your debit balance, so the amount you owe grows the longer you hold. That rising loan slowly pushes your margin call price up and raises the return you need just to break even. Enter your broker's annual rate in the optional field to see the monthly and yearly interest cost on your loan — a number that's easy to overlook until it compounds.

Pattern day trader equity calls vs maintenance margin calls

These are often conflated but are different things. A maintenance margin call is about your equity percentage on a held position, as described above. A pattern day trader (PDT) equity call comes from a separate FINRA rule: an account flagged as a pattern day trader (four or more day trades within five business days in a margin account) must maintain at least $25,000 in equity, and can face a day-trading buying-power call if it trades beyond its limit. You can be in good standing on maintenance margin and still trip the PDT rule, or vice versa — they measure different things.