Margin trading calculator

How do you calculate a margin trade?

Start from the purchase: purchase value = shares x buy price. Your own cash pays for part of it and the broker lends the rest, so loan = purchase value - your cash. Your equity is the market value of the shares minus the loan, and the broker watches it as a percentage of the market value.

With the default inputs, 400 shares at $50 cost $20,000. You put in $10,000 and borrow $10,000, so your equity starts at 50%. At an annual rate of 8% for 90 days, on a 360-day basis, the loan costs $10,000 x 8% x 90 / 360 = $200 in interest. If you sell at $55, the shares have gained $2,000, and after interest you keep $1,800, which is 18% of your own $10,000. Without the loan, the same cash buys 200 shares and the same rise earns 10%.

The headline figure is the price that matters most while the position is open: $33.33. That is where your equity would shrink to the 25% maintenance requirement, a fall of 33.33% from the buy price.

How is buying power calculated?

Buying power = your cash / initial margin requirement. The initial requirement is the share of a purchase you must fund yourself. At 50%, every dollar of your own can carry two dollars of shares; at 100% there is no loan at all.

If you ask for more shares than your cash supports at the requirement you enter, the calculator says how much more of your own money the purchase needs and how many shares your cash does cover. Brokers can set a higher requirement for a volatile or thinly traded share, so the field is yours to change.

At what price do you get a margin call?

A margin call comes when equity, as a share of the market value, falls to the maintenance requirement m. Equity is shares x price - loan, so setting it equal to m x shares x price and solving for the price gives:

margin call price = loan / (shares x (1 - m))

On the default trade that is 10,000 / (400 x 0.75) = $33.33. Check it: 400 shares at $33.33 are worth $13,333.33, the loan is still $10,000, so equity is $3,333.33, exactly 25% of the market value. The higher the maintenance requirement your broker sets, the sooner the call arrives:

Below the call price the broker asks you to restore the equity. At $30, for example, the shares are worth $12,000 and your equity is $2,000; 25% of $12,000 is $3,000, so it takes a $1,000 deposit to get back to the requirement. If the call is not met, the broker can sell shares to repay the loan, and it does not have to wait for you or pick the moment you would choose.

How much does margin interest cost?

Margin interest is charged on the loan, not on the whole position: interest = loan x annual rate x days held / day count. The calculator treats it as simple interest on the opening loan. Loan terms state whether the annual rate is divided by 360 or by 365 days, and the choice sits under Interest day count.

Interest also moves the margin call price. When interest is charged to the account instead of paid in cash, it adds to the loan, and a larger loan raises the price at which a call arrives. On the default trade, adding the $200 of interest to the $10,000 loan lifts the call price from $33.33 to $34.00. The result card shows both figures.

Margin rules in the US: Regulation T and FINRA Rule 4210

Two sets of rules set the floors for a US margin account. Both are minimums, and a broker can ask for more:

• Initial margin, Regulation T. The Federal Reserve Board's Regulation T, at 12 CFR 220.12 (the e-CFR text, read 13 November 2026), sets the required margin for a margin equity security at 50% of its current market value, or the percentage set by the regulatory authority where the trade occurs, whichever is greater. That is the 50% default above.
• Maintenance margin, FINRA Rule 4210. The rule on finra.org (read 13 November 2026) sets maintenance margin for long positions at 25% of the current market value of the margin securities held. That is the 25% default.
• Minimum equity. The same FINRA rule requires a customer to have equity of at least $2,000 in a margin account, though cash need not be deposited beyond the cost of the securities bought.

For short sales the same two rules set different figures, which the short selling calculator works through. Margin lending in the UK, Europe, Canada, Australia and the Gulf runs under each region's own rules and each firm's own lending terms, so type the requirements from your account agreement into the calculator. The arithmetic does not change.

Margin trading examples in pounds and euros

• Pound account, a loss. £5,000 of cash buys 300 shares at £30, a £9,000 purchase, so £4,000 is borrowed and equity starts at 55.56%. The broker's maintenance requirement is 30%, which puts the margin call at 4,000 / (300 x 0.70) = £19.05, a 36.51% fall. The loan costs 6.5% a year on a 365-day basis. The shares are sold after 120 days at £27: a £900 fall in value plus £85.48 of interest is a loss of £985.48, or 19.71% of the £5,000, while the share price fell 10%.
• Euro account, a gain. €8,000 of cash buys 200 shares at €60. The purchase is €12,000, the loan €4,000 and the starting equity 66.67%. With a 35% maintenance requirement the call price is €30.77, 48.72% below the buy price. Thirty days at 5% on a 360-day basis costs €16.67, and a sale at €66 leaves a profit of €1,183.33, a 14.79% return on the €8,000 for a 10% rise.

A smaller loan gives more room. The euro trade borrows a third of the purchase and can fall almost half before a call; the default dollar trade borrows half and has a third of the way to fall.

How a margin loan changes your return

A loan does not change how far the share price moves. It changes how much of your own money each move represents. On the default trade, $20,000 of shares sit on $10,000 of your cash, so every 1% move in the price is 2% of your money, and the $200 of interest comes off whichever way the price goes:

A flat price is a 2% loss, because the interest is still owed. The second chart under the calculator redraws this table for your own inputs. These are arithmetic illustrations of the loan, not a view on whether to borrow.

How to calculate a margin call price in Excel or Google Sheets

Put your cash in B2, the buy price in C2, the shares in D2, the maintenance requirement as a decimal in E2 (0.25), the annual rate as a decimal in F2 (0.08) and the days held in G2. Then:

• Loan: =MAX(0, D2*C2-B2), which returns 10,000 for the defaults.
• Equity percentage at purchase: =(D2*C2-H2)/(D2*C2) with the loan in H2.
• Margin call price: =H2/(D2*(1-E2)), which returns 33.33.
• Interest: =H2*F2*G2/360, or /365 if your loan terms use 365 days.
• Buying power: =B2/0.5 for a 50% initial requirement.

To see the cash a margin call would ask for at a lower price P in J2, use =MAX(0, E2*D2*J2-(D2*J2-H2)). At $30 it returns 1,000.

What this calculator leaves out, and common mistakes

It works on one purchase and the numbers you type. It ignores commission, dividends received while you hold, tax, and changes in the interest rate during the loan. It does not follow the price day by day or apply a broker's house rules, such as a higher requirement for a concentrated or volatile holding. A gap in the price overnight can take a position straight through the margin call price, and a broker that sells to cover the loan sells at whatever price it gets.

• Reading buying power as spending money. It is the most the broker will lend against, not an amount that has to be used.
• Forgetting interest on a flat trade. A share that ends where it started still loses the interest.
• Using the initial requirement for the margin call. The call is set by the maintenance requirement, which is lower.
• Expecting time to meet a call. A broker can sell without waiting.
• Ignoring interest added to the loan. It raises the margin call price as the weeks pass.

Glossary

Margin account: a brokerage account that lends against the securities in it. Margin loan or debit balance: the money borrowed from the broker. Equity: the market value of the shares minus the loan. Initial margin requirement: the share of a purchase you must pay with your own money. Maintenance requirement: the lowest equity percentage the broker accepts while the position is open. Buying power: cash divided by the initial requirement. Margin call: a demand to deposit cash or securities, or sell, when equity falls below the maintenance requirement. Day count: the number of days a year the annual rate is spread over.

Frequently asked questions

Courses behind trading on margin

Sources and review