Margin Call Examples

Example 1 Example 2 Example 3 Example 4 Example 5

Initial Portfolio Value 20,000 50,000 100,000 75,000 12,000
Your Initial Equity (Margin) 10,000 30,000 50,000 40,000 10,000
Maintenance Margin Requirement 25% 30% 30% 35% 30%
Portfolio Value to Trigger Margin Call 13,333.33 28,571.43 71,428.57 53,846.15 2,857.14
Your Equity at Time of Margin Call 3,333.33 8,571.43 21,428.57 18,846.15 857.14
Portfolio % Loss at Time of Margin Call 33.33% 42.86% 28.57% 28.21% 76.19%

To figure the portfolio value that will

trigger a margin call:

IM % −1
V2 = ×V1
MM % −1
Where:
IM% = Initial Equity as a % of Portfolio Value
MM% = Required Minimum Equity %
V1 = Initial Value of Portfolio
V2 = Portfolio Value To Trigger Margin Call